Sfas 116. Information for nonprofits on FASB 116 & 117 2022-12-09
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Blue Ocean Strategy is a business theory and approach developed by W. Chan Kim and Renée Mauborgne in their 2005 book of the same name. It is based on the idea that organizations can create new market spaces, or "blue oceans," by offering unique products or services that are not found in existing markets, or "red oceans," which are crowded with competitors vying for the same customers.
According to Kim and Mauborgne, blue ocean strategy is about creating value for both the company and the customer. It involves finding untapped market opportunities and creating value through differentiation and low cost. By doing so, a company can achieve both a competitive advantage and a higher price for its products or services.
One key aspect of blue ocean strategy is value innovation, which involves creating value for both the company and the customer through a combination of differentiation and low cost. This involves finding new ways to deliver value to customers that are not offered by competitors and that meet their needs at a lower cost.
Another key aspect of blue ocean strategy is the idea of eliminating or reducing the factors that drive industry competition. This can be achieved through the creation of a new value curve, which plots the factors that drive industry competition against the value that customers receive from a product or service. By eliminating or reducing certain factors, a company can create a new value curve that offers greater value to customers at a lower cost, thus allowing it to differentiate itself from competitors.
There are several tools and techniques that can be used to implement blue ocean strategy, including the "Four Actions Framework," which involves identifying and eliminating factors that drive industry competition, reducing factors that are not important to customers, creating factors that are unique and attractive to customers, and raising factors that are important but undervalued by the industry.
In conclusion, blue ocean strategy is a business approach that involves finding untapped market opportunities and creating value through differentiation and low cost. It is based on the idea of creating value for both the company and the customer and involves the use of tools and techniques such as the Four Actions Framework to implement this strategy. By following a blue ocean approach, organizations can achieve a competitive advantage and higher prices for their products or services, while also meeting the needs of their customers in a unique and innovative way.
Promises to give i. If an organization has an expense at least as large, and for the same purpose, as the temporarily restricted donation, then the restriction of the temporarily restricted donation has been met. . . Permanently Restricted — The Not-for-profit organizations need to be familiar with the changes that relate to SFAS 116 and 117 to be in compliance and to ensure the organization is reporting contributions correctly. .
Both organizations offer emergency shelter services and rehabilitation programs for the homeless among other services. . . . . Cash pledges due in less than one year are recognized as pledges receivable and donation revenue at the time a donor makes a promise to give. .
SFAS No. 116 changes accounting procedures for contributions
For example, development officers will need to know the exact terms of contributions in order to correctly record them under the new standards, legal assistance may be needed to determine the proper treatment for endowment fund gains and losses, and computer assistance may be required to accommodate the new reporting requirements. The exposure draft called for requiring the direct method of reporting cash flows from operations and eliminating the reconciliation of cash flows from operating activities with the statement of activity. FAS 116 locations the prerequisites for perceiving commitments and FAS 117 locations the necessities for money related articulations. . I examined the IRS Forms 990 for the Springfield Rescue Mission, Inc.
Those early memories have evoked my interest for the financial world. Services requiring specialized skills are provided by accountants, architects, carpenters, doctors, electricians, lawyers, nurses, plumbers, teachers, and other professionals and craftsmen. . . Objectives 14 5 12 acct 450 ch5 Key 1. .
. At the point when there are confinements place on the commitment there are two conditions to consider preceding acknowledgment: 1. . . . The new standard addresses matters on which there was greater consensus, while leaving others for future consideration. Auditors can help by providing recommendations that will facilitate the implementation process.
. . If such resources were further restricted under the provisions of an endowment, they were to be shown as a reclassification to the appropriate donor-restricted fund in a statement of changes in fund balance. . Comments: Shemeke, you did an excellent job on your assignment regarding the financial health of not-profit and for-profit organizations. Executive Summary 5 II. .
. . Under this standard three financial statements including Statement of Cash Flows, Statement of Financial Position and Statement of Activities are required by all such organizations. Question 2 I expect to learn from experiential accounting how to analyze financial information in order to make better decisions. . About the authors David T. .
If you are located in Washington state and would like a detailed list of the provisions of both standards and a guide to their implementation, please call Sue Lewis at 206 454-4919. SFAS 116 defines how contributions are designated. Implementing the Standard It appears that FASB still has a good deal of work to do to convince its constituents that more detailed statements of activities or new cash flow classifications serve the public interest; for this reason, those portions of the nonprofit reporting project have been deferred until a future time. In deciding what to include in the two intermediate performance measures, FASB identified two components: mission and availability. The material appearing in this communication is for informational purposes only and should not be construed as legal, accounting, tax, or investment advice or opinion provided by MossAdamsLLP or its affiliates. Specifically, SFAS 116 provides guidelines on understanding the basis of donations made by donors to highlight the terms and conditions lay out by donors and accepted by the receivers.
. The paper " summary Of The Plato's Allegory Of The Cave" describes Plato's allegory of the Cave is also popularly known by the name of Analogy of the Cave or the Parable of the Cave. The two standards are Financial Accounting Standard No. The FASB concluded that restricted contributions only limit the use of the funds but do not result in liabilities. The FASB decided that instead of a credit to interest revenue, an organization should credit donation revenue. One accounting policy is to imply a time restriction on donations of long-lived assets. .