Annual Financials Explained
Annual Financials Explained The financial statements are from our 2017 Annual Report at http://www.keironorthwest.org/annual-report/
The annual report contains financials that have been independently audited, to ensure that KNW has reliable and accurate financial information. Thus, our annual report cannot be released until after the audit has concluded.
Every year, typically in March, Keiro Northwest is audited by a third-party, Hansen & Hunter. The auditor examines our financial information to make sure it is accurate, appropriate, and complete.
Types of Financials
Consolidated Statement of Financial Position – a.k.a., the Balance Sheet (B/S).
Consolidated Statement of Activities – a.k.a., the Income Statement (I/S).
Reports the value of KNW’s assets, liabilities, and net assets as of December 31.
Summarizes the revenue and expenses generated during the entire year.
Balance Sheet (B/S) - Components The B/S reports whether KNW is growing/shrinking in value and how.
Assets
Liabilities Reports financial obligations that are payable to others.
Anything of value that is owned by KNW.
Net Assets Reports funds that are restricted by donors vs. available for any use.
KNW Balance Sheet - 2017 Assets Anything of value that is owned by KNW. Represents cash that is in our bank accounts.
Money owed to KNW for services provided.
Funds that have been invested in the stock market, bonds, etc.
The “used” value of KNW’s buildings and equipment, reflecting that these assets are no longer brand new.
KNW Balance Sheet – 2017 Liabilities Reports financial obligations that are payable to others. Money owed to vendors for services and goods provided. Money owed for payroll, employee benefits, and vacation.
Prepaid revenue for future services (e.g., tours).
Money borrowed for general operating purposes.
Money borrowed to finance the cost of a building.
Balance Sheet – 2017 Net Assets Reports whether remaining assets are donor restricted. Represents assets that were earned or donated and can be used for any purpose.
Represents donated funds that have been reserved by KNW’s board for certain uses.
Money donated to KNW where a donor has specified how the funds must be used.
Money donated to KNW for the endowment. Only the earnings can be spent. The original donation cannot.
Income Statement (I/S) - Components The I/S reports whether KNW is earning more than it is spending.
Revenue Expenses
Change to Net Assets
Money earned for providing services, or selling goods (e.g., bento). Also includes earnings from investments and donations. Money spent to generate revenue. I.e., the cost of operating a business.
The difference between revenue and expenses will either increase or decrease net assets on the balance sheet.
Income Statement – 2017 Revenue Money earned for providing services. Also includes earnings from investments and donations.
Revenue earned for providing nursing care at KRCC, and assisted living services at the Manor.
Earnings generated directly from investments, and gains (losses) from selling invested assets.
All donations provided to KNW.
Revenue earned from all other programs, including Kokoro Kai, Catering, Home Care, Transportation, and Nikkei Horizons.
Identifies when a donor restriction has been fulfilled for a donation made in a prior year.
Income Statement – 2017 Expenses Money spent to generate revenue. I.e., the cost of operating a business. Payroll costs and benefits (e.g., insurance) for our employees.
Costs that support the overall organization, including fundraising events, software, copying and printing, legal fees, and expert consulting (e.g., dieticians, physicians).
Includes costs directly associated with providing care, including meals, medical supplies, rehab therapy, and pharmacy costs.
Costs for having a physical presence in a building, including utilities, security, and telephone.
Income Statement – 2017 Expenses (cont.) Money spent to generate revenue. I.e., the cost of operating a business. Costs for repairing and maintaining the building and equipment.
Represents the loss in value of KNW’s building and equipment as it is used throughout the year.
Primarily covers costs for maintaining insurance, and business taxes, e.g., business & occupancy (B&O) taxes.
Represents when assets must be written-off the balance sheet. Typically this happens when insurance companies or customers fail to pay KNW.
Income Statement – 2017 Change in Net Assets Difference between revenue and expenses will increase or decrease net assets on the balance sheet.
This is the net difference between revenue and expenses. This will adjust unrestricted net assets.
This is the current year’s portion of contributions made directly to the endowment.
Represents the change in value of investments. These gains (losses) only become real if the investment were sold.
This is the net assets balance that will be displayed on the balance sheet.
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