Private Colleges & Universities
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Development of Accounting Standards
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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
Specific Quirks: Private Institutions
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Financial Statements
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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
Revenue Reduction vs Expenses
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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
Academic Term Revenue
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Academic terms that fall
into parts of two fiscal
years
No guidance by AICPA or
SFAS (FASB) 116
NACUBO recommends:
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Apportionment to two
years using accrual
accounting principles
Miscellaneous Quirks
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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
Split-Interest Agreements
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AICPA Not-for-Profit Guide
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Charitable Lead Trust: SFAS 136 (p. 345-346)
Perpetual Trust: Held by Third Party
Contributions Revenue, permanently restricted
 Annual income depends
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Charitable Remainder Trust
Charitable Gift Annuity
Pooled (Life) Income Fund