Private Colleges

1
Private Colleges Universities

• Development of Accounting Standards
• NACUBO
• 1973 AICPAs Audits of Colleges and Universities
• FASB 93, 116, 117, 124, 133, 136
• GAAP basically the same as we studied in Chapter
  10

2
Specific Quirks Private Institutions

• Financial Statements
• Considerable flexibility Any of five formats are
  acceptable for S of FP (See page 335)
• Example of Corporate (aggregated) style of
  Financial Position Statement and Cash Flow
  Statement in text pp. 347-348
• Statement of Unrestricted Revenue, Expenses and
  other Changes in Net Assets and Statement of
  Changes in Net Assets on pp. 345-346

3
Revenue Reduction vs Expenses

• Generally, revenue and expenses reported at gross
• Discounts reported as reduction of revenue
• Discounts do not require work by recipient
• Examples are academic and athletic scholarships
• Bad debt expenses also included as discounts

4
Academic Term Revenue

• Academic terms that fall into parts of two fiscal
  years
• No guidance by AICPA or SFAS (FASB) 116
• NACUBO recommends
• Apportionment to two years using accrual
  accounting principles

5
Miscellaneous Quirks

• When both unrestricted and restricted resources
  are available for restricted purposes, FASB
  requires use of restricted first
• Expenses are reported by function, either in
  financial statements or notes
• Collections reported as required by FASB 117
• Fund Raising Expenses Same as Chapter 10

6
Split-Interest Agreements

• AICPA Not-for-Profit Guide
• Charitable Lead Trust SFAS 136 (p. 345-346)
• Perpetual Trust Held by Third Party
• Contributions Revenue, permanently restricted
• Annual income depends
• Charitable Remainder Trust
• Charitable Gift Annuity
• Pooled (Life) Income Fund