Private Colleges & Universities

1. Private Colleges & Universities • Development of Accounting Standards • NACUBO • 1973 AICPA’s 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