Section 4433 Contains a Compromise Provision Applicable to Small NFPOs

question 24

Multiple Choice

Section 4433 contains a compromise provision applicable to small NFPOs. Which of the following statements pertaining to a small NFPO is false?

• A) A small NFPOs average of annual revenues recognized in the statement of operations for the current and preceding period is less than $500,000.
• B) The small NFPO is exempt from having to record donated capital assets at fair value.
• C) A small NFPO is exempt from having to capitalize and amortize tangible capital assets.
• D) A small NFPO can choose to expense a capital asset when it is acquired.

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Definitions:

Significant Influence

Refers to the power to participate in the financial and operating policy decisions of an investee but is not control or joint control over those policies.

Voting Shares

Shares that give the shareholder the right to vote on corporate matters, such as electing the board of directors and approving policies.

Voting Shares

Shares of a company that give the shareholder the right to vote on corporate matters and board elections.

Associate

An entity over which an investor has significant influence, typically evidenced by owning 20% to 50% of the voting stock, but not control.