The director believes that the term “operating profit” and the practice of segregating recurring and…


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The director believes that the term “operating profit” and the practice of segregating recurring and… 1 answer below » Forkin Manor, a nongovernmental not-for-profit organization, is interested in having its financial statements reformatted using terminology that is more readily associated with for-profit entities. The director believes that the term “operating profit” and the practice of segregating recurring and nonrecurring items more accurately depict the organization’s activities. Under what condition will Forkin be allowed to use “operating profit” and to segregate its recurring items from it nonrecurring items in its statement of activities? The organization reports the change in unrestricted net View complete question » Forkin Manor, a nongovernmental not-for-profit organization, is interested in having its financial statements reformatted using terminology that is more readily associated with for-profit entities. The director believes that the term “operating profit” and the practice of segregating recurring and nonrecurring items more accurately depict the organization’s activities. Under what condition will Forkin be allowed to use “operating profit” and to segregate its recurring items from it nonrecurring items in its statement of activities? The organization reports the change in unrestricted net assets for the period. A parenthetical disclosure in the notes implies that the not-for-profit organization is seeking for-profit entity status. Forkin receives special authorization from the Internal Revenue Service that this wording is appropriate. At a minimum, the organizations reports the change in permanently restricted net assets for the period. View less » Jul 08 2014 12:34 PM

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