The CPA Journal

December 2001

Wiley Not-for-Profit Accounting Field Guide, 2001

By Marie DiTommaso and Richard F. Larkin

Published by Wiley, $24.95, ISBN 0-471-38903-X, 264 pp., paperback

Reviewed by Patrick F. Monaghan III, CPA, director of technical services, P.F. Monaghan & Company

This book, designed to fit easily into a briefcase or pocket, is a quick reference to the unique accounting and financial reporting issues that affect nonprofit organizations. Although it covers the gamut of GAAP fundamentals in clear and concise language, some chapters are irrelevant.

On the plus side, much of the book dovetails with the guide's purpose. For example, Chapter 3, Fund Accounting, offers practical advice and a straightforward discussion of SFAS 117, which eliminates the requirement for nonprofit organizations to use fund accounting in the presentation of financial statements. This chapter gives excellent, concise definitions of funds, assets, and fund balances, and correctly asserts that a nonprofit is a single entity rather than a series of separate entities called funds. The application of this logic produces financial statements that combine all the year's activities in a meaningful manner. The chapter also gives excellent examples regarding restricted contributions and cautions against applying the principles and terminology of governmental accounting to not-for-profit accounting.

Chapter 5, Contributions, Pledges, and Noncash Contributions, is in itself worth the price of the book. It is one of the best texts on the subject this reviewer has encountered, with practical, real-life examples presented in succinct and readable plain English. Each topic is presented in a consistent format and sequence, facilitating comparison to facts and circumstances encountered in the field. This chapter introduces each topic and issue, gives clear reference to the authoritative literature, then fully examines it. Chapter 5's six appendices contain extensive and practical checklists. The appendices present the facts and also address the interpretational issues of applicability to particular circumstances with specific fact patterns, using enough references to help make informed assessments about how to treat a particular transaction in the field.

On the other hand, Chapter 12, Importance of Budgets to a Not-for-Profit, is generally excellent but needs more examples and a more practical approach. For example, the chapter does not refer to the ways that different reimbursement methodologies can affect budgeting. The pages of non- not-for-profit-specific information in other chapters would be better used to expand chapters like this.

Overall, this guide has much to recommend itself. My hope is that future editions will focus more closely on not-for-profit-specific issues, the end result being a more useful field guide.