Topics: Financial statements, Board of directors, MCC Pages: 18 (3658 words) Published: March 7, 2014
December 19, 2013

Topic: Financial Reporting for Not-for-Profit

Not-for-profit organizations have their own set of unique issues that are not prevalent in the for-profit organizations. For example, many not-for-profits do not offer a product or service for which forecasted revenues can be made (e.g. charities, environmental organizers, humanitarian aid, health care, religion, the arts, animal protection, etc.). The extent to which it can generate income may be constrained or restricted. It may be dependent on government funding, sponsorship or simply the generosity of donors, thus making the task of covering expenses arduous.

The reliance on volunteers is another unique characteristic of not-for-profits. Often, there is little in the way of record-keeping data on hours of work or duties performed, making it difficult to determine actual resources required. The volunteers may not be qualified to perform the functions they volunteered for. In addition, training may be erratic and inconsistent, and volunteer motives may be self-serving. This assignment is based on a short case entitled Middletown Community Centre (MCC), a not-for-profit organization (Appendix 1). In this assignment, candidates have an opportunity to discuss the critical issues faced by the MCC. This case presents several financial reporting issues, and it is difficult to decide how to meet the needs of the various financial statement users. The implications of alternative accounting treatments of the issues will be discussed at the Interactive Session. Learning Outcome

By the end of the assignment, candidates will have demonstrated good judgment in the identification and ranking of issues based on a critical analysis of the various stakeholder concerns.

© 2013 The Society of Management Accountants of Canada. All rights reserved. ®/™ Registered Trade-Marks/Trade-Marks are owned by The Society of Management Accountants of Canada. No part of this document may be reproduced in any form without the permission of the copyright holder.

Due Date
Please refer to the Schedule accessed from the left navigation menu of the CMA Canada Professional Programs website.
Required Readings
1. Middletown Community Centre, Appendix 1 of this assignment. 2. “Canadian Advanced Accounting,” Chapter 11. Authors: Clarence Byrd and Ida Chen (CMA Online Library).
3. “Accounting Standards for Not-for-Profit Organizations: Background Information and Bases for Conclusions,” located in the CICA website: Online Discussion
MCC (Appendix 1) has many unresolved reporting issues that need to be addressed to satisfy the requirements of external financial statement users and internal decision makers. As well, the first financial statement audit is upcoming. Identify the stakeholders and their needs for financial reporting. Explain how the selection of the reporting framework and the use of fund accounting can meet the needs of some users but not others. Rank the stakeholders’ needs in terms of importance and explain why.

Initial responders should post a response of no more than 500 words* and all other candidates should post two responses of no more than 250 words* each (approximately half a page). Responders should feel free to challenge the ideas of the initial responders and provide supporting documentation to qualify their position. Those who agree with the initial responder should provide more reasons to justify their position and present further supporting documentation to qualify their position. Initial responders are at liberty to respond to any comments received.

These online discussion responses are to be posted directly to the Discussion Board through the direct link provided below this posted assignment requirement. The Discussion Board can also be accessed from the left navigation menu. Ensure you post...
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