Statement Of Financial Position Analysis

Statement of Financial Position
The Financial Accounting Standards Board (FASB) creates Statements of Financial Accounting Standards. Nonprofits are required to produce financial statements as outlined in the Statement of Financial Accounting Standard 117 (SFAS 117) (FASB, 1993). SFAS 117 standardizes the presentation of the financial statements by all nonprofits but not the frequency for production (Miller, 2009). SFAS 117 requires that all nonprofits prepare the following: Statement of Financial Position, Statement of Activities, and Statement of Cash Flows (FASB, 1993). A Statement of Functional Expenses is another report required in SFAS 117 but is only required to be produced by voluntary health and welfare organizations (FASB, 1993).

The Statement of Financial Position shows the cash and cash equivalents in two separate balances, cash and cash equivalents and cash and cash equivalents – restricted. It shows accounts receivable at net, inventory and prepaid expenses as total current assets. It shows property and equipment net of accumulated depreciation. Under liabilities and net assets it shows the balances of accounts payable, accrued expenses, unearned revenue and refundable deposits. Under net assets it shows unrestricted which is divided into two balances, undesignated and board designated and also shows a balance of temporarily restricted net assets (Ellsworth & Stout, CPAs, 2015). The Statement of Financial Position shows the breakout of net assets into two categories: unrestricted and temporarily restricted. Since the museum does not have an endowment account there are no permanently restricted net assets and therefore a third breakout was not required at the time the financials were created (Ellsworth & Stout, CPAs, 2015). Since the Statement of Financial Position shows the separate net asset balances, the museum complies with SFAS 117 as it’s related to the Statement of Financial