A main difference is the section that presents the difference between the total assets and total liabilities. The nonprofit's statement of financial position refers to this section as net assets, whereas the for-profit business will refer to this section as owner's equity or stockholders' equity. The reason is the nonprofit does not have owners. This means that the nonprofit organization's statement of financial position will reflect this equation: assets – liabilities = net assets.

The net assets section will consist of the following parts: net assets without donor restrictions and net assets with donor restrictions. The amounts reported in each of these parts are obviously based on the donor's stipulations.

View Our Course Outline