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Limits of Not-For-Profit Organizations

To what extent do not-for-profit organizations have the ability to choose among the following:
a. Using depreciation,
b. Ignoring depreciation,
c. Maintaining building and equipment on the balance sheet at their original cost,
d. Showing such assets at their market value, or
e. Completely charging such assets such as expenses in the year acquired?

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To what extent do not-for-profit organizations have the ability to choose among the following:
a. Use Depreciation - Despite there being many methods of depreciation, a nonprofit should only use the straight line method. In the straight line method, the value of a fixed asset is depreciated evenly over the life of the asset. For example, an organization purchases a printer for $300 and determines that the useful life is three years. The company will record $100 as the depreciation. The depreciation expense will be debited and the accumulated depreciation will be credited. The accumulated depreciation is a negative depreciation account, which will be used to record the depreciation and lower the value of a fixed asset without changing the ...

Solution Summary

The limits of not-for-profit organizations are examined.

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