Using a previous selected NFP CAFR or another NFP CAFR you are interested in, what significant way does this not-for-profit account for investments differently from businesses?
According to the notes in the AARP’s annual financial reports, investments with original maturities of three months or less are reported as cash equivalents.
How are the investments reflected in the statements of the not-for-profit?
The AARP accounts for investments by reporting on activities of each fund; while businesses account for investments by focusing on the organization as a whole.
What are the disclosure requirements for this not-for-profit as related to investments?
The disclosure requirements for the AARP as related to investments is that: “Investments in debt securities, institutional mutual funds, equity securities and derivative financial instruments are measured and reported at fair value. The fair value of debt securities, institutional mutual funds, and equity securities with a readily determinable fair value are based on quotations obtained from national security exchanges. Debt securities, institutional mutual funds, equity securities and derivative financial instruments with fair values that are not readily determinable, are carried at estimated fair values as provided by the investments managers. AARP management reviews and evaluates the values provided by the investment managers and agrees with the valuation methods and assumptions used in determining their estimated fair value. Due to the inherent uncertainties of these estimates, these values may differ from the values that would have been reported had a ready market for such investments existed.”
The Purpose of Derivative Instruments The differences between traditional and derivative instruments: The main difference between traditional and derivative instruments is that derivatives are traded on forward markets. The term derivative means to derive a...
Not-for-Profit Contributions and the AARP Many of us make pledges such as to NPR, or other organizations (religious groups, social organizations, etc…) When a not-for-profit (NFP) receives these they must account for them. Sometimes though,...
Financial Statements and Reports Required by the AARP Either using a previous selected NFP CAFR or another NFP CAFR you are interested in; identify what financial statements are required of that organization? The not-for-profit financial reports for the...
FASB Statement 117 and Classifications of Net Assets Using a previous selected NFP CAFR or another NFP CAFR you are interested in, identify the three classifications of net assets established by FASB Statement 117? In accordance with FASB...
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