Not-for-profit entities : March 1, 2017.

Chapter Paragraph -- 1 Introduction 01-27 -- Scope 01-12 -- Entities 01-06 -- Basis of Accounting 07-10 -- Level of Service 11-12 -- GAAP for NFPs 13-19 -- Fund Accounting and Net Asset Classes 20-25 -- Other Resources for Financial Reporting by NFPs 26-27 -- 2 General Auditing Considerations 01-150 -- Overview 01-02 -- Purpose of an Audit of Financial Statements 03-08 -- Audit Risk 05-08 -- Terms of Engagement 09-11 -- Audit Planning Considerations 12-59 -- Group Audits 14-18 -- Using the Work of an Auditor’s Specialist 19-24 -- Materiality 25-33 -- Related-Party Transactions 34-37 -- Consideration of Errors and Fraud 38-41 -- Compliance With Laws and Regulations 42-56 -- Processing of Transactions by Service Organizations 57-59 -- Use of Assertions in Assessment of Risks of Material Misstatement 60-64 -- Risk Assessment Procedures 65-88 -- Risk Assessment Procedures and Related Activities 67-69 -- Analytical Procedures 70-72 -- Discussion Among the Audit Team 73 -- Understanding of the Entity and Its Environment, Including the Entity’s Internal Control 74-88 -- Using Risk Assessment to Design Further Audit Procedures 89-111 -- Identifying and Assessing the Risks of Material Misstatement 90-92 -- Risks That Require Special Audit Consideration 93-94 -- Designing and Performing Further Audit Procedures 95-110 -- Evaluating the Sufficiency and Appropriateness of Audit Evidence 111 -- Evaluation of Misstatements Identified During the Audit 112-114 -- Communication With Those Charged With Governance 115-121 -- Completing the Audit 122-149 -- Going-Concern Considerations 122-132 -- Written Representations 133-141 -- Audit Documentation 142-149 -- Appendix A—Consideration of Fraud in a Financial Statement Audit 150 -- 3 Financial Statements, the Reporting Entity, and General Financial -- Reporting Matters 01-193 -- Introduction 01-05 -- Statement of Financial Position 06-27 -- Effects of Restrictions, Designations, and Other Limitations on Liquidity 09-23 -- Classification of Net Assets 24-27 -- Statement of Activities 28-45 -- Reporting Expenses, Including in a Statement of Functional Expenses 40-45 -- Statement of Cash Flows 46-54 -- Comparative Financial Information 55-57 -- Reporting of Related Entities, Including Consolidation 58-121 -- Relationships With Another NFP 63-71 -- Relationships With a For-Profit Entity 72-99 -- Consolidation of a Special-Purpose Leasing Entity 100-101 -- Consolidated Financial Statements 102-119 -- Parent-Only and Subsidiary-Only Financial Statements 120 -- Combined Financial Statements 121 -- Mergers and Acquisitions 122-135 -- Merger of Not-for-Profit Entities 124-125 -- Acquisition by a Not-for-Profit Entity 126-135 -- Collaborative Arrangements 136-137 -- The Use of Fair Value Measures 138-171 -- Definition of Fair Value 141-147 -- Valuation Approaches and Techniques 148-154 -- The Fair Value Hierarchy 155-158 -- Additional Guidance for Fair Value Measurement in Special Circumstances 159-167 -- Disclosures 168 -- Fair Value Option 169-171 -- Financial Statement Disclosures Not Considered Elsewhere 172-184 -- Noncompliance With Donor-Imposed Restrictions 173-175 -- Risks and Uncertainties 176 -- Subsequent Events 177-180 -- Related Party Transactions 181-184 -- Auditing 185-192 -- Financial Statement Close Process 186-187 -- Operating and Nonoperating Classifications in the Statement of Activities 188 -- Consolidation 189 -- Liquidity 190 -- Mergers and Acquisitions 191 -- Noncompliance With Donor-Imposed Restrictions 192 -- Supplement A—Flowcharts 193 -- Table of Contents xix -- 4 Cash, Cash Equivalents, and Investments 01-117 -- Cash and Cash Equivalents 01-04 -- Investments Discussed in This Chapter 05-10 -- Initial Recognition and Measurement of Investments 11-12 -- Valuation of Investments Subsequent to Acquisition 13-43 -- Equity Securities With Readily Determinable Fair Value (Other Than Consolidated Subsidiaries and Equity Securities Reported Under the Equity Method) and All Debt Securities 17 -- Investments That Are Accounted for Under the Equity Method or a Fair Value Election 18-27 -- Derivative Instruments 28-36 -- Other Investments 37 -- Decline in Fair Value After the Date of the Financial Statements 38 -- Fair Value Measurements 39-43 -- Investment Income and Expenses 44-52 -- Unrealized and Realized Gains and Losses 53-55 -- Investments Held as an Agent 56 -- Investment Pools 57-63 -- Self-Managed Investment Pools 57 -- Investment Pools Managed by a Financially Interrelated Entity 58 -- Investment Pools Managed by Third Parties 59-63 -- Endowment Funds 64-78 -- Financial Statement Presentation 79-88 -- Cash and Cash Equivalents 79-82 -- Investments 83-88 -- Disclosures 89-101 -- Auditing 102-117 -- Endowment Funds 107 -- Investment Pools 108-113 -- Audit Objectives and Procedures 114-116 -- Appendix A—Determining Fair Value of Alternative Investments 117 -- 5 Contributions Received and Agency Transactions 01-242 -- Introduction 01-04 -- Distinguishing Contributions From Other Transactions 05-57 -- Agency Transactions 07-22 -- Variance Power 23-27 -- Financially Interrelated Entities 28-32 -- Similar Transactions That Are Revocable, Repayable, or Reciprocal 33-38 -- Exchange Transactions 39-57 -- Core Recognition and Measurement Principles for Contributions 58-88 -- Recognition Principles 59-66 -- Measurement Principles 67-70 -- Recognition If a Donor Imposes a Condition 71-74 -- Recognition If a Donor Imposes a Restriction 75-88 -- Additional Accounting Considerations for Certain Contributions 89-179 -- Promises to Give 89-111 -- Contributed Services 112-117 -- Special Events 118-122 -- Gifts in Kind 123-149 -- Contributed Items to Be Sold at Fund-raising Events 150-151 -- Contributed Fund-raising Material, Informational Material, or Advertising, Including Media Time or Space 152-163 -- Contributed Utilities and Use of Long-Lived Assets 164-166 -- Guarantees 167-171 -- Below-Market Interest Rate Loans 172-174 -- Contributed Collection Items 175 -- Split-Interest Agreements 176 -- Administrative Costs of Restricted Contributions 177-179 -- Measurement Principles for Contributions Receivable 180-212 -- Present Value Techniques 183-186 -- Organization of the Measurement Guidance 187 -- Initial Measurement 188-196 -- Subsequent Measurement 197-212 -- Financial Statement Presentation 213-215 -- Disclosures 216-222 -- Illustrative Disclosures 222 -- Auditing 223-240 -- Contributions Receivable 237-239 -- Agency Transactions 240 -- Appendix A—Excerpt From AICPA Financial Reporting White Paper Measurement of Fair Value for Certain Transactions of Not-for-Profit Entities 241 -- Appendix B—Technical Questions and Answers About Financially Interrelated Entities 242 -- 6 Split-Interest Agreements and Beneficial Interests in Trusts 01-96 -- Introduction 01 -- Types of Split-Interest Agreements 02-03 -- Recognition and Measurement Principles 04-45 -- Use of Fair Value Measures 05-06 -- Recognition of Revocable Agreements 07 -- Recognition of Irrevocable Agreements 08-12 -- Initial Recognition and Measurement of Unconditional Irrevocable Agreements Other Than Pooled Income Funds or Net Income Unitrusts 13-27 -- Initial Recognition and Measurement of Pooled Income Funds and Net Income Unitrusts 28 -- Recognition and Measurement During the Agreement’s Term for Unconditional Irrevocable Agreements Other Than Pooled Income Funds or Net Income Unitrusts 29-40 -- Recognition and Measurement During the Agreement’s Term for Pooled Income Funds and Net Income Unitrusts 41 -- Recognition Upon Termination of Agreement 42 -- Purchase of Annuity Contracts to Make Distributions to the Beneficiaries 43-45 -- Financial Statement Presentation 46-53 -- Statement of Financial Position 46 -- Statement of Activities 47 -- Disclosures 48-53 -- Examples of Split-Interest Agreements 54-88 -- Charitable Lead Trust 55-61 -- Perpetual Trust Held by a Third Party 62-66 -- Charitable Remainder Trust 67-73 -- Charitable Gift Annuity 74-78 -- Pooled (Life) Income Fund 79-83 -- Life Interest in Real Estate 84-88 -- Auditing 89-94 -- Appendix A—Excerpt From AICPA White Paper Measurement of Fair Value for Certain Transactions of Not-for-Profit Entities 95 -- Appendix B—Journal Entries 96 -- 7 Other Assets 01-45 -- Introduction 01 -- Inventory 02-10 -- Acting as an Agent in a Sale of Commodities 10 -- Prepaid Expenses, Deferred Costs, and Similar Items 11-15 --

Collections and Works of Art, Historical Treasures, or Similar Assets 16-28 -- Financial Statement Presentation of Collections 25-27 -- Illustrative Disclosures About Collections 28 -- Goodwill 29-31 -- Intangible Assets Other Than Goodwill 32-35 -- Auditing 36-45 -- Inventory 37 -- Goodwill 38-39 -- Collection Items 40-45 -- 8 Programmatic Investments 01-71 -- Introduction 01-07 -- Core Considerations for Accounting and Reporting 08 -- Loans 09-52 -- Effective Interest Rate Approach 11-17 -- Inherent Contribution Approach 18-33 -- Loans That Contain a Right to Profit From the Sale or Refinancing of Property 34 -- For

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