Course Description

Module Coverage

1. Overview of NPOs

• Definition of not-for-profit organisations 
• Legal structures and governance of NPOs 
• Importance of financial transparency and accountability in NPOs
• Number of charities in Singapore (IPC/ Registered charities/sector)
• Sector administrator looking after charities
• 30/70 rule 

2. Understanding the NPO Financial Statements 

i. Introduction to NPO Financial Statements 

• Statement of Financial Position (Balance Sheet)
• Statement of Financial Activities (Income Statement)
• Statement of Funds
• Statement of Cash Flows
• Presentation of Balance Sheet and Income Statement by funds
• Notes to the Financial Statements

ii. Key Accounts in NPO Financials 

• Revenue: Donations, grants, membership fees, earned income
• Expenses: Programme services, fundraising, administrative costs
• Assets: Plant and equipment, right of use assets, cash, investments
• Liabilities: Trade and other payables, government grant liability
• Net assets: Unrestricted, temporarily restricted, and permanently restricted
• Reserve funds and the need to track usage separately 

3. Accounting Principles and Concepts for NPOs 

i. Fund Accounting

• Understand the fund accounting system
• Tracking restricted vs. unrestricted funds including designated
• How to allocate and manage funds for specific purposes

ii. Revenue Recognition for NPOs

• Understanding the recognition of grants, donations, and other income sources
• Accrual basis of accounting
• Donor-imposed restrictions and their impact on revenue reporting (Grant accounting difference between CAS vs FRS)

iii. Cost Allocation

• Direct vs indirect costs
• Allocating overhead costs properly (e.g. administrative expenses vs programme costs)
• Accrual basis of accounting
• The importance of transparency in cost allocation for accountability and reporting purposes