When analyzing financial statements, it’s important to compare multiple periods to determine any trends and compare the company’s results to its peers in the same industry. Using a statement of financial activities template can also help to ensure that financial information is presented consistently, making it easier for stakeholders to understand and interpret the data. Additionally, tracking financial performance by class, location, and project can be valuable for budgeting and strategic planning purposes.
Ratio analysis uses important ratio metrics to calculate statistical relationships. At month-end, the books close, and all revenue and expense accounts adjust to zero. The net impact of the income statement activity posts as net income on the balance sheet and increases the equity balance.
Financial Performance
Other income could include gains from the sale of long-term assets such as land, vehicles, or a subsidiary. All of the vital accounting statements that you pull together to draw conclusions from are pulled from your nonprofit chart of accounts. Your nonprofit statement of financial position is another key document for your cause. Contact Jitasa’s team of nonprofit accountants to compile your statement of activities. You’re required by FASB 117 to report your expenses by functional classification, meaning you’ll need to at least split up your expenses by administrative, fundraising, and program costs.
- Internal constituents use it as a monitoring tool for managing the finances.
- The Statement of Activities is the Income Statement of a nonprofit organization.
- The statement of activities may be requested by major donors, or your client may have to provide certain information from the statement when preparing a grant application.
- The three major financial statement reports are the balance sheet, income statement, and statement of cash flows.
- At Simplicity Financial, we offer a wide range of services tailored to meet your unique financial needs.
A donor could give a single donor that is to equally be split across 3 years. We consider that there is a time restriction on the funds allowing only 1/3 of the donation to become unrestricted in a given year. Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development. Any other donations that do not come with a designation can be termed unrestricted funds. If you cannot find a nonprofit’s Statement of Activities, you can also ask the organization for a copy.
Is there a difference between a statement of activities and an income statement?
Using accounting conventions makes your financial statements comparable and realistic. For example, the principle of consistency requires accountants to apply standards consistently year after year. In ExxonMobil’s statement of changes in equity, the company also records activity for acquisitions, dispositions, statement of financial activities amortization of stock-based awards, and other financial activities. This information is useful for analyzing how much money is being retained by the company for future growth as opposed to being distributed externally. Operating revenue is the revenue earned by selling a company’s products or services.
Primary expenses are incurred during the process of earning revenue from the primary activity of the business. Expenses include the cost of goods sold (COGS), selling, general and administrative expenses (SG&A), depreciation or amortization, and research and development (R&D). If you are looking for a template to use for your organization, we highly recommend downloading ours to help you present your financial data in a clear and organized manner.
Are income statements and Statements of Activities the same?
Think of it as a financial photo, showing your assets, debts, and overall net worth. Financial activities result in either a surplus (increase) or shortfall/deficit (decrease) in the organization’s net assets shown on the Statement of Financial Position (SOFP). Net results are classified as either with or without donor restrictions per FASB (the Financial Accounting Standards Board). The result of each year’s financial activity is shown as the “change in net assets,” that is, increases or decreases to the related net assets categories. The P&L is important because it provides a high-level overview of how much money the nonprofit is bringing in and where it is being spent.
