P & L for Non-Profits?

[OC Del Guy]

Since a Non-Profit Organization doesn't make a profit. What report does the accountant generate instead of the profit and loss statement?

 

[jonathan.a.clark]

Income Statement Alternative

A viable alternative would be a cash flow statement. But in any case, it would be recommended that an accountant produce an income statement. The decision makers would want to know how they're doing on a month-to-month basis.

 

[gralynjacques]

Statement of Activities

Look at last year's audit and pattern your financials to accordingly. Because of FASB 116, Revenues can be inflated and give a non-profit a false sense of security. I recommend a good Cash Flow Statement as well. Black ink on the P&L does not always reflect the real picture in operations.

 

[LoveEventing]

The income statement for a non-profit organization is called the Statement of Activities. It shows the change in net assets for the year instead of "net income/loss" as in a for-profit entity. However, the format is essentially the same, taking Revenues less Expenses.

Generally, the Statement of Activities is broken out between temporarily restricted, permanently restricted, and unrestricted activities.

 

[cpetraining]

CPE Accountant

I recommend a good Cash Flow Statement as well.

 

[gsoClarke]

Nonprofit is a tax status, not a balance sheet description!

Glad LoveEventing pointed out the nonprofit name for the P&L as the Statement of Activities and its need for Restricted, Temporarily Restricted, and Unrestricted Income. There is a parallel need for those categories on the Statement of Position (Balance Sheet), too. Gotta keep up with how much is available for what when, eh?

 

[timpgoetz]

LoveEventing and gsoClarke nailed this and are the only correct answers in this thread.

-Tim Goetz, CPA

 

[BrianT]

QuickBooks Non-profit edition could be a better way to manage the show for Non profit organizations. I worked with several accountants working with that and quite comfortable with its features.

 

[Rizwan]

Surplus income over expenditure