Lesson 3 – Changes to Net Assets

 

Statement of Activities and Changes to Net Assets

The primary purpose of the Statement of Activities and Changes in Net Assets is to provide relevant information about the sources of and uses of income and the effect of those transactions on specific net asset classes.

Revenue is grouped by Net Asset Class (With Donor Restrictions and Without Donor Restrictions) and is listed by the type of revenue received — grants, program revenue, donations, earned revenue.

This statement helps donors, creditors, and others to evaluate the organization’s performance during a period, assesses an organization’s service efforts and its ability to continue to provide services. It also assesses how an organization’s managers have discharged their stewardship responsibilities and other aspects of their performance.