Voluntary Health Welfare Organizations VHWOs Examples YMCA United

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Voluntary Health & Welfare Organizations (VHWO’s) ¨ Examples: YMCA United Way American Heart Association

Voluntary Health & Welfare Organizations (VHWO’s) ¨ Examples: YMCA United Way American Heart Association ¨ Most organizations are Non-Gov’t, but may receive some government support.

Accounting Authority GASB Government Supported FASB Non-Government Supported (Most)

Accounting Authority GASB Government Supported FASB Non-Government Supported (Most)

FAS #116 Impact ¨ Major – since contributions are major sources of revenue. FAS

FAS #116 Impact ¨ Major – since contributions are major sources of revenue. FAS #117 Impact ¨ Major – since most VHWO’s prepared financial statements on a disaggregated (layered) basis.

Sources of Accounting Authority: ¨ AICPA Audit Guide – Audits of VHWO’s (1974) ¨

Sources of Accounting Authority: ¨ AICPA Audit Guide – Audits of VHWO’s (1974) ¨ Audit & Accounting Guide – NPO’s (1996) ¨ SFAS #116 ¨ SFAS #117 ¨ SFAS #124, 133, and 135

Financial Statements ¨Statement of Financial Position (Net Assets as to Restriction Category) ¨Statement of

Financial Statements ¨Statement of Financial Position (Net Assets as to Restriction Category) ¨Statement of Activities ¨Statement of Cash Flows ¨Statement of Functional Expenses

VHWO Accounting Notes of Importance… ¨ Revenues – Full Accrual Basis – Gross Amounts

VHWO Accounting Notes of Importance… ¨ Revenues – Full Accrual Basis – Gross Amounts – Conditional & Unconditional – Categories of Restrictions – PV for Multiyear Contributions

VHWO Accounting Notes of Importance… ¨ Expenses – Full Accrual Basis – Reported Only

VHWO Accounting Notes of Importance… ¨ Expenses – Full Accrual Basis – Reported Only in Unrestricted Net Asset Class – Involves Reclassification of Use of Temporarily Restricted Assets – Reported by Function & Natural Classification

Healthcare Accounting ¨ Types of Organizations – Nongovernmental NFP – Governmental – Commercial (For-Profit)

Healthcare Accounting ¨ Types of Organizations – Nongovernmental NFP – Governmental – Commercial (For-Profit) ¨ Financial Accounting Standards – Category A: FASB & GASB Hierarchy – Category B: AICPA Healthcare Guide (1997)

Healthcare Accounting ¨ Governmental, Nongovernmental NPO’s, and Commercial Healthcare entities are similar. – Business

Healthcare Accounting ¨ Governmental, Nongovernmental NPO’s, and Commercial Healthcare entities are similar. – Business type activities (substantial % of revenue is for services provided) – AICPA instrumental in developing standards for all types – Therefore FASB & GASB have accepted AICPA Audit Guide as category B GAAP – FASB and GASB requirements are supplemented by AICPA Guide

Financial Statements-NG ¨Statement of Operations ¨Statement of Changes in Net Assets ¨Statement of Financial

Financial Statements-NG ¨Statement of Operations ¨Statement of Changes in Net Assets ¨Statement of Financial Position ¨Statement of Cash Flows

Governmental Hospitals ¨ Required to follow GASB #34 (Category A) and AICPA Health Care

Governmental Hospitals ¨ Required to follow GASB #34 (Category A) and AICPA Health Care Guide (Category B) GAAP ¨ Reporting as— – Special Purpose Government (Chapter 9) • S of R, E, & Changes in NA may be two statements as illustrated in Chapter 12 – Enterprise Fund (Illustrations 6 -1, 6 -2, 6 -3)