In this lesson, Nick Palazzolo, CPA, demystifies the not-for-profit Statement of Activities, which mirrors the functionality of a traditional income statement by reflecting the entity’s revenues, expenses, gains, and losses over a period of time. He elaborates on the unique feature of net asset classification in non-profits, breaking down the reclassification between restricted and unrestricted net assets and explaining how these reflect changes from donors' contributions. Nick provides a clear walk-through of an example statement, highlighting the nuances of revenue recognition and the impact of donor restrictions. He also ensures that the key concepts, such as the changes in total net assets and the shifts between restrictions, are clarified to ensure a solid grasp on the topic. This lesson is structured to build familiarity with the format and function of the Statement of Activities, making it digestible and less daunting.
Lesson: Introduction to the Statement of Activities
In this lesson, Nick Palazzolo, CPA, demystifies the not-for-profit Statement of Activities, which mirrors the functionality of a traditional income statement by reflecting the entity’s revenues, expenses, gains, and losses over a period of time. He elaborates on the unique feature of net asset classification in non-profits, breaking down the reclassification between restricted and unrestricted net assets and explaining how these reflect changes from donors' contributions. Nick provides a clear walk-through of an example statement, highlighting the nuances of revenue recognition and the impact of donor restrictions. He also ensures that the key concepts, such as the changes in total net assets and the shifts between restrictions, are clarified to ensure a solid grasp on the topic. This lesson is structured to build familiarity with the format and function of the Statement of Activities, making it digestible and less daunting.
Updated: Oct. 20, 2021 Create an account