A finished ACC-658 Topic 8 board liquidity briefing example, explaining to a nonprofit's board how much of its net assets is spendable, what restricts the rest and what its functional expenses show. Searches like "acc 658 topic 8 assignment example", "acc658 topic 8 sample" and "acc-658 topic 8 example" land here.
What a finished ACC-658 Topic 8 board liquidity briefing looks like
The finished briefing is two pages written for board members who do not read financial statements professionally. It opens with the answer: of $6.4 million in net assets, about $0.9 million in financial assets is available for general spending over the next year, a little over two months of operating costs. The illustrative figures behind that answer follow in plain terms. Donors have restricted $3.1 million, including a $2.0 million endowment that must be held permanently and $1.1 million for named programs. Most of the $3.3 million without donor restrictions is the building, net of its mortgage, and $0.4 million the board itself set aside as a reserve. A second part takes up the board's question about overhead, which rose because shared office costs are now allocated by floor space. The briefing ends with one decision for the board.
How an ACC-658 Topic 8 example is structured
The briefing is ordered by the questions a board member would ask, with no statement reproduced in full. Its first paragraph gives the spendable figure and what it means in months of operations, against annual expenses of $4.9 million. A second explains the gap between total net assets and that figure, taking donor restrictions, the building and the board's own reserve in turn. The third distinguishes what donors restricted, which the board cannot change, from what the board designated, which it can release by vote. Functional expenses come next: program services, management and general, and fundraising, with the reason the management share rose from 10 to 12 percent. A short passage says what the figures do not show, such as pledges not yet received. The briefing closes by asking the board to decide whether the reserve should be rebuilt toward three months of costs.
The spendable figure given first
About $0.9 million is available for general spending within a year, which the briefing converts at once into a little over two months of operations.
Net assets taken apart in order
Donor restrictions, the building net of its mortgage and the board's reserve are subtracted one at a time, so each board member sees where the $6.4 million sits.
Donor restrictions separated from board choices
The $3.1 million donors restricted cannot be touched by any vote, while the board's $0.4 million reserve can be released at its next meeting.
An overhead rise explained by allocation
Management and general rose from 10 to 12 percent of expenses because shared office costs moved to a floor-space basis, not because administration grew.
What the figures leave out
Pledges promised but not yet received and the timing of grant reimbursements are named, since either could move the spendable figure during the year.
One decision put to the board
The board is asked whether the reserve should be rebuilt toward three months of costs, about $1.2 million, and told what that would require from unrestricted giving.
Where marks go in ACC-658 Topic 8
Presenting the statement of financial position to a board and calling total net assets the organization's cushion is the loss this closing topic is built around, since $6.4 million overstates spendable resources more than sevenfold. Briefings written in accounting vocabulary, with no translation of terms such as net assets with donor restrictions, fail the readers they are addressed to. Treating the board's reserve as restricted misleads the board about its own authority. Papers that explain liquidity without converting it into months of operations give members a figure they cannot judge. Answering the overhead question with a percentage and no reason invites the conclusion that administration has grown. A briefing that ends without asking for a decision reports to the board without helping it govern.
Get an ACC-658 Topic 8 example written to your instructions
Send the ACC-658 Topic 8 instructions and your classroom rubric, together with the organization's statements or the scenario your section was given. A custom example is written to those criteria for a reader who is not an accountant, with the spendable figure first, restrictions separated from designations, functional expenses explained and one decision put forward, in 24 to 48 hours. The first request is free.
ACC-658 Topic 8 questions, answered
What does available within one year mean?
Financial assets, such as cash, investments and receivables, that the organization could use for general spending in the coming year without breaching a donor restriction or a board designation it has chosen to honor. Not-for-profits disclose this figure along with how they manage liquidity. It is usually far smaller than total net assets, because buildings are not spendable and restricted gifts can be used only for their stated purposes.
Why did the overhead percentage change?
Often because costs were allocated differently, not because spending changed. Shared costs such as rent, utilities and an executive director's time are divided among program services, management and general, and fundraising using a basis the organization chooses. Moving from headcount to floor space, for instance, shifts costs between functions while total spending stays the same. A board briefing should name the basis and say what changed.
Should the briefing include the full statements?
Usually not in the body. Board members need the figures that bear on decisions, explained in plain words, with the audited statements available for anyone who wants them. Attach them or point to where they are kept. A briefing that reproduces every line forces readers to find the answer themselves, which is the work the briefing was written to do for them.