Accounting of non-profit organizations

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Accounting of non-profit organizations

Non-profit organizations play an important role in society, implementing socially significant projects and initiatives. Their activities are based on the principles of altruism and are aimed at achieving socially useful goals, not at making a profit.

However, similar to commercial structures, non-profit organizations are required to keep accounting records. This process has certain features that are important to know in order to avoid mistakes and legal problems.

What organizations are non-profit?

According to Ukrainian legislation, non-profit organizations include organizations that:

  • Created for a non-commercial purpose: educational, scientific, medical, cultural, environmental, charitable, sports, religious, etc.
  • Do not distribute the received income among its members, founders, employees, other related persons.
  • They keep accounting records and prepare financial statements in accordance with the legislation.

The list of non-profit organizations includes, in particular:

  • Public associations: unions, unions, associations, etc.
  • Charitable funds.
  • Religious organizations.
  • Creative unions.
  • Educational and scientific institutions.

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Features of accounting of non-profit organizations

Accounting of non-profit organizations has a number of features that distinguish it from accounting in commercial structures:

  1. Accounting of income and expenses. Non-profit organizations are required to keep records of income and expenses by item in accordance with the Classifier of income and expenses of non-profit organizations, approved by the Ministry of Finance of Ukraine.
  2. Accounting for targeted funding. Funds received from the state, international organizations, donors, grants, etc. must be accounted for separately and used exclusively for their intended purpose.
  3. Preparation of financial statements: non-profit organizations prepare financial statements in the form of a Balance Sheet, a Statement of Financial Results, a Statement of Cash Flows and a Statement of Equity.
  4. Tax benefits: Some non-profit organizations are entitled to certain tax benefits, including exemptions from income tax, value added tax (VAT) and other taxes.

The main possible accounting errors of non-profit organizations

The most common accounting errors of non-profit organizations are:

  • Incorrect determination and accounting of income and expenses.
  • Improper registration and storage of primary documents.
  • Violation of the procedure for using targeted funding.
  • Late preparation and submission of financial statements.
  • Improper application of tax benefits.

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Possible consequences of accounting errors of non-profit organizations

Errors in the accounting of non-profit organizations can lead to serious negative consequences, such as:

  • Penalties and fines from regulatory authorities.
  • Loss of non-profit organization status.
  • Refusal to provide targeted funding.
  • Damage to business reputation.
  • Court proceedings.

Such problems can be avoided only thanks to keeping accounting records in compliance with all norms and requirements of the law.

“Prykhodko and partners”: professional accounting of non-profit organizations

The legal company “Prykhodko and Partners” offers a wide range of accounting services for non-profit organizations. Our qualified specialists will help you:

  1. Develop and implement an accounting system that meets all legal requirements.
  2. Keep records of income and expenses, targeted funding, primary documents.
  3. Prepare and submit financial statements.
  4. Optimize tax obligations.
  5. Conduct an accounting audit.
  6. Provide advice on accounting and taxation issues.

Contact us and we will help you ensure the transparency and legality of your accounting reports.

Advantages of cooperation with “Prykhodko and partners”:

  1. Experience and knowledge: our specialists have many years of experience working with non-profit organizations and know all the intricacies of their accounting.
  2. Individual approach: we will develop an accounting system that will meet your needs and the specifics of your organization.
  3. Privacy: We guarantee the privacy of all your information.
  4. Fair prices: we offer transparent prices for our services.

Contact us now for detailed advice and professional accounting services.

If you decide to order a consultation or want to know the cost of accounting for a non-profit organization, fill out the form below.

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Vorozhbitova Krystyna
Chief Accountant

Leading specialist with practical experience in economics and accounting.

Contact now
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