Chapter 1 Introduction 01-27 Scope 01-12 Entities 01-06 Basis of Accounting 07-10 Level of Service 11-12 GAAP for NFPs 13-19 Fund Accounting and Net Asset Classes 20-25 Other Resources for Financial Reporting by NFPs 26-27 Chapter 2 General Auditing Considerations 01-150 Overview 01-02 Purpose of an Audit of Financial Statements 03-08 Audit Risk 05-08 Terms of Engagement 09-11 Audit Planning Considerations 12-59 Group Audits 14-18 Using the Work of an Auditor''s Specialist 19-24 Materiality 25-33 Related-Party Transactions 34-37 Consideration of Errors and Fraud 38-41 Compliance with Laws and Regulations 42-56 Processing of Transactions by Service Organizations 57-59 Use of Assertions in Assessment of Risks of Material Misstatement 60-64 Risk Assessment Procedures 65-88 Risk Assessment Procedures and Related Activities 67-69 Analytical Procedures 70-72 Discussion among the Audit Team 73 Understanding of the Entity and Its Environment, Including the Entity''s Internal Control 74-88 Using Risk Assessment to Design Further Audit Procedures 89-111 Identifying and Assessing the Risks of Material Misstatement 90-92 Risks That Require Special Audit Consideration 93-94 Designing and Performing Further Audit Procedures 95-110 Evaluating the Sufficiency and Appropriateness of Audit Evidence 111 Evaluation of Misstatements Identified During the Audit 112-114 Communication with Those Charged With Governance 115-121 Completing the Audit 122-149 Going-Concern Considerations 122-132 Written Representations 133-141 Audit Documentation 142-149 Appendix A--Consideration of Fraud in a Financial Statement Audit 150 Chapter 3 Financial Statements, the Reporting Entity, and General Financial Reporting Matters 01-194 Introduction 01-05 Statement of Financial Position 06-27 Effects of Restrictions, Designations, and Other Limitations on Liquidity 09-23 Classification of Net Assets 24-27 Statement of Activities 28-45 Reporting Expenses, Including in a Statement of Functional Expenses 40-45 Statement of Cash Flows 46-54 Comparative Financial Information 55-57 Reporting of Related Entities, Including Consolidation 58-121 Relationships with another NFP 63-71 Relationships with a For-Profit Entity 72-99 Consolidation of a Special-Purpose Leasing Entity 100-101 Consolidated Financial Statements 102-119 Parent-Only and Subsidiary-Only Financial Statements 120 Combined Financial Statements 121 Mergers and Acquisitions 122-135 Merger of Not-for-Profit Entities 124-125 Acquisition by a Not-for-Profit Entity 126-135 Collaborative Arrangements 136-137 The Use of Fair Value Measures 138-171 Definition of Fair Value 141-147 Valuation Approaches and Techniques 148-154 The Fair Value Hierarchy 155-158 Additional Guidance for Fair Value Measurement in Special Circumstances 159-167 Disclosures 168 Fair Value Option 169-171 Financial Statement Disclosures Not Considered Elsewhere 172-184 Noncompliance with Donor-Imposed Restrictions 173-175 Risks and Uncertainties 176 Subsequent Events 177-180 Related Party Transactions 181-184 Auditing 185-192 Financial Statement Close Process 186-187 Operating and Nonoperating Classifications in the Statement of Activities 188 Consolidation 189 Liquidity 190 Mergers and Acquisitions 191 Noncompliance with Donor-Imposed Restrictions 192 Supplement A--Flowcharts 193 Appendix A--Financial Statements Prepared in Accordance with FASB ASU No. 2016-14 194 Chapter 4 Cash, Cash Equivalents, and Investments 01-118 Cash and Cash Equivalents 01-04 Investments Discussed in This Chapter 05-10 Initial Recognition and Measurement of Investments 11-12 Valuation of Investments Subsequent to Acquisition 13-44 Equity Securities with Readily Determinable Fair Value (Other Than Consolidated Subsidiaries and Equity Securities Reported Under the Equity Method) and All Debt Securities 17 Investments That Are Accounted for Under the Equity Method or a Fair Value Election 18-28 Derivative Instruments 29-37 Other Investments 38 Decline in Fair Value after the Date of the Financial Statements 39 Fair Value Measurements 40-44 Investment Income and Expenses 45-53 Unrealized and Realized Gains and Losses 54-56 Investments Held as an Agent 57 Investment Pools 58-64 Self-Managed Investment Pools 58 Investment Pools Managed by a Financially Interrelated Entity 59 Investment Pools Managed by Third Parties 60-64 Endowment Funds 65-79 Financial Statement Presentation 80-89 Cash and Cash Equivalents 80-83 Investments 84-89 Disclosures 90-102 Auditing 103-117 Endowment Funds 108 Investment Pools 109-114 Audit Objectives and Procedures 115-117 Appendix A--Determining Fair Value of Alternative Investments 118 Chapter 5 Contributions Received and Agency Transactions 01-242 Introduction 01-04 Distinguishing Contributions from Other Transactions 05-57 Agency Transactions 07-22 Variance Power 23-27 Financially Interrelated Entities 28-32 Similar Transactions That Are Revocable, Repayable,or Reciprocal 33-38 Exchange Transactions 39-57 Core Recognition and Measurement Principles for Contributions 58-88 Recognition Principles 59-66 Measurement Principles 67-70 Recognition If a Donor Imposes a Condition 71-74 Recognition If a Donor Imposes a Restriction 75-88 Additional Accounting Considerations for Certain Contributions 89-179 Promises to Give 89-111 Contributed Services 112-117 Special Events 118-122 Gifts in Kind 123-149 Contributed Items to Be Sold at Fund-raising Events 150-151 Contributed Fund-raising Material, Informational Material, or Advertising, Including Media Time or Space 152-163 Contributed Utilities and Use of Long-Lived Assets 164-166 Guarantees 167-171 Below-Market Interest Rate Loans 172-174 Contributed Collection Items 175 Split-Interest Agreements 176 Administrative Costs of Restricted Contributions 177-179 Measurement Principles for Contributions Receivable 180-212 Present Value Techniques 183-186 Organization of the Measurement Guidance 187 Initial Measurement 188-196 Subsequent Measurement 197-212 Financial Statement Presentation 213-215 Disclosures 216-222 Illustrative Disclosures 222 Auditing 223-240 Contributions Receivable 237-239 Agency Transactions 240 Appendix A--Excerpt From AICPA Financial Reporting White Paper Measurement of Fair Value for Certain Transactions of Not-for-Profit Entities 241 Appendix B--Technical Questions and Answers about Financially Interrelated Entities 242 Chapter 6 Split-Interest Agreements and Beneficial Interests in Trusts 01-96 Introduction 01 Types of Split-Interest Agreements 02-03 Recognition and Measurement Principles 04-45 Use of Fair Value Measures 05-06 Recognition of Revocable Agreements 07 Recognition of Irrevocable Agreements 08-12 Initial Recognition and Measurement of Unconditional Irrevocable Agreements Other Than Pooled Income Funds or Net Income Unitrusts 13-27 Initial Recognition and Measurement of Pooled Income Funds and Net Income Unitrusts 28 Recognition and Measurement during the Agreement''s Term for Unconditional Irrevocable Agreements Other Than Pooled Income Funds or Net Income Unitrusts 29-40 Recognition and Measurement during the Agreement''s Term for Pooled Income Funds and Net Income Unitrusts 41 Recognition upon Termination of Agreement 42 Purchase of Annuity Contracts to Make Distributions to the Beneficiaries 43-45 Financial Statement Presentation 46-53 Statement of Financial Position 46 Statement of Activities 47 Disclosures 48-53 Examples of Split-Interest Agreements 54-88 Charitable Lead Trust 55-61 Perpetual Trust Held by a Third Party 62-66 Charitable Remainder Trust 67-73 Charitable Gift Annuity 74-78 Pooled (Life) Income Fund 79-83 Life Interest in Real Estate 84-88 Auditing 89-94 Appendix A--Excerpt From AICPA White Paper Measurement of Fair Value for Certain Transactions of Not-for-Profit Entities 95 Appendix B--Journal Entries 96 Chapter 7 Other Assets 01-45 Introduction 01 Inventory 02-10 Acting as an Agent in a Sale of Commodities 10 Prepaid Expenses, Deferred Costs, and Similar Items 11-15 Collections and Works of Art, Historical Treasures, or Similar Assets 16-28 Financial Statement Presentation of Collections 25-27 Illustrative Disclosures about Collections 28 Goodwill 29-31 Intangible Assets Other Than Goodwill 32-35 Auditing 36-45 Inventory 37 Goodwill 38-39 Collection Items 40-45 Chapter 8 Programmatic Investments 01-71 Introduction 01-07 Core Considerations for Accounting and Reporting 08 Loans 09-52 Effective Interest Rate Approach 11-17 Inherent Contribution Approach 18-33 Loans That Contain a Right to Profit from the Sale or Refinancing of Property 34 <.