Lee College free essay sample

An alternate for the Statement of Activites is the combination between the Statement of Unrestricted Revenues, Expenses and Other Changes in Unrestricted Net Assets and the Statement of Changes in Net Assets. These three statements are interchangable, in the fact that either one statement can be provided, or two statements can be provided instead. Although they are interchangable in a sense, they are prepared differently. The Statement of Activites includes all of the information the other two statements provide—it’s just in one place. Private colleges are required to report their net assets in three ways, unrestricted, temporarily restricted and permanetly restricted. Here we will discuss what these net asset categories mean, how it relates to Lee College and how the three interchangable statements are prepared. The Statement of Activites gives an overview of the unrestricted, temporarily restricted and permanently restricted revenues, gains and other support for Lee College. This statement allows you to compare each net asset cost to one another. We will write a custom essay sample on Lee College or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The revenues are specifically listed out between what type of revenue the item is, from scholarships, grants, contributions, sales and so on. Same with the expenses, these items are listed out as well, to show what type of expense and how much money is spent. Most of the revenues for Lee College are considered unrestricted, meaning the college can use these revenues at their discression and they do not have restrictions or guidelines that have to be followed to use the funds. There are both grants and contributions given to Lee College that are temporarily restricted. Funds and donations that are temporarily restricted have specificifications or restrictions that they have to be used under. The restrictions are given to the college by the donor and eventually be lifted after a period of time set by the donor. Under the permanently restricted column of the Statement of Activites, there are both contributions and gains on long term investments that are listed here. Permanently restricted revenues are intended for plant items to be maintained permanently. Lee College has contributions and long term investment gains that are permanently restricted. Also under the revenues, there are net assests released from restrictions. What happened in Lee College’s situation is that the program/use restrictions, plant acquistion restrictions and other expiration of time restrictions were lifted, adding these amounts to the unrestricted column, but they are taken out of the temporarily restricted column; because they are no longer considered temporarily restricted. Each column for revenues, gains and other support as well as the net assests released from restrictions are added to a total. Below them are the expenses for Lee College. Expenses are considered unrestricted, so there are not items in the temporarily or permanently restricted columns. The total expenses are then taken from the total revenues, gains and other support to calculate the change in net assets. This total is then added the beginning net asset amount. The total between the two is the net assets ending for December 12, 2012. The Statement of Unrestricted Revenues, Expenses and Other Changes in Unrestricted Net Assets only lists the unrestr icted revenues, net assets released from restrictions (because these have been transferred from temporarily restricted to unrestricted, as noted above), and expenses and losses. Rather than stating the net asset change in all three categories, this specifically shows the increase (or decrease) in the unrestricted net assets. After completing all of the statements required, if you take the first column, unrestricted assets, this would be your breakdown for the Statement of Unrestricted Revenues, Expenses and Other Changes in Unrestricted Net Assets because that is all this includes. Like the Statement of Activites, the revenues and expenses are listed out to identify where they came from and were spent. * The Statement of Changes in Net Assets includes everything that is in the Statement of Activites, but it is listed in a different way. Unlike the Statement of Activities, where the revenues and expenses are specifically listed out, these items are grouped together so the total amounts can be easily identified as well as determined. The net assets as of December 31, 2012 reflected here is the same as on the Statement of Activities. * Based on the Statement of Net Asset Changes, the net assets increased almost $5 million dollars. I think the main reason there was such an increase was because of the items that had been released from temporary restricted assets, to unrestricted, as well as the permanently restricted contributions to Lee College. Although these contributions are restricted, it still adds to the wealth of the college. There will come a time where these will come to use and will be avaliable as unrestricted funds. Although the expenses are very close to the revenues in 2012, there was still an increase in the net assets for unrestricted net assets of almost $1 million. * References * Copley, P. A. (2011). Essentials of Accounting for Governmental and Not-for-Profit Organizations. (10th ed. ). Boston: McGraw-Hill Irwin.