Section 1: 30–40%1B3

Statement of Cash Flows (NFP)

Exam insight

Contributions are the heart of NFP accounting, and the hardest part. A donor gives cash 'for the new building' - with donor restriction or without? It hinges on whether the restriction is purpose-based or time-based. And board-designated funds look restricted but are legally unrestricted. Miss these distinctions and you'll misclassify net assets on every question.

What AICPA wants you to know

1Apply the three-section structure (operating, investing, financing) to NFP cash flows
2Classify contributions with donor restrictions correctly in the cash flow statement
3Determine where endowment receipts and investment returns appear
4Explain NFP-specific cash flow classification rules under ASC 958

Patterns in this topic

The exam re-skins the same archetypes. Recognize these here, then drill them in the Pattern Lab.

The Cash Flow MapEvery flow lands in operating, investing, or financing by its nature, and non-cash deals go only in the schedule.The Pledge TestUnconditional pledges are revenue now, discounted if long-term; conditional pledges wait as refundable advances until the barrier falls.

Exam tip

Study smarter: before you expand each card, cover the screen and try to recall what the concept means from its title alone. Retrieving it from memory builds the recall the exam actually tests, and it beats re-reading.