Statement of Activities
What is a Statement of Activities?
A statement of activities is a not-for-profit organization’s equivalent of an income statement.
![sa1](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa1-1.jpg)
How it Works
Income Statement
A for-profit organization will prepare an income statement at the end of each accounting period.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa2-1.jpg)
All the information for this report comes from the income and expense accounts.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa3-1.jpg)
The difference between income and expenses shows net profit for the period.
![sa4](https://seeaccountingnow.online/wp-content/uploads/2021/06/sa4.jpg)
Statement of Activities
By contrast, a not-for-profit organization prepares a statement of activities at the end of each accounting period.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa5-1.jpg)
Some of this report’s information comes from the income and expense accounts.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa6-1.jpg)
Expense accounts include things such as fund raising expenses, management, and administration.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa7-1.jpg)
Income accounts show revenue generated from such things as contributions, fees, grants, investments etc.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa8-1.jpg)
However, unlike an income statement, the statement of activities includes other accounts, as well.
![sa9](https://seeaccountingnow.online/wp-content/uploads/2021/06/sa9.jpg)
It shows net assets at the beginning of the accounting period.
![sa10](https://seeaccountingnow.online/wp-content/uploads/2021/06/sa10.jpg)
Net assets is the difference between assets and liabilities.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa11-1.jpg)
In other words, it is the difference between what the organization owns and what it owes to others at the beginning of the period.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa12-1.jpg)
Finally, the statement of activities will show any net assets released from restrictions.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa13.jpg)
With non-profit organizations, donors make donations.
![sa14](https://seeaccountingnow.online/wp-content/uploads/2021/06/sa14.jpg)
These donations are held as an asset of some kind, such as money in the bank.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa15.jpg)
Often, donors will place restrictions on how their donation is to be used.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa16.jpg)
Most of the time, these restrictions are time based.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa17.jpg)
Some of these assets may fall due for release during the period.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa18.jpg)
Once released, the assets finally become revenue for the organization.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa19.jpg)
As such, the released assets need to be shown in the statement of activities.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa20.jpg)
All of this activity will change net assets over the period.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa21.jpg)
When complete,the change in net assets will be reflected in the statement of activities balance.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa22.jpg)
The balance will include net assets at the beginning of the period.
![sa23](https://seeaccountingnow.online/wp-content/uploads/2021/06/sa23.jpg)
It will also include any increase in net assets due to releases from restriction.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa24.jpg)
And it will also include any increase in net assets from operating profit.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/sa25.jpg)
© R.J. Hickman 2020