What are the required external financial statements in VHWO?

Required external financial statements include the following:
1. Statement of Financial Position (balance sheet) which will report organization-wide totals for assets, liabilities, and net assets, and net assets identified as unrestricted, temporarily restricted, and permanently restricted.

2. Statement of Activities which reports revenues, expenses, gains, losses, and re-classifications (between classes of net assets). Minimum requirements include organization-wide totals, changes in net assets for each class of assets, and all expenses recognized only in the unrestricted classification. A display of a measure of operations in the statement of activities is permitted.

3. Statement of Cash Flows with categories (operating, financing, investing, etc.) similar to business organizations.
4. Statement of Functional Expenses which reports detailed program, fund-raising, and management and general expenses (required only for voluntary health and welfare organizations).

In addition, information about liquidity must be provided. Liquidity is commonly reported through sequencing assets and liabilities according to nearness of conversion to or use of cash on the statement of financial position. Such sequencing requires cash and contributions receivable restricted by donors to investment in land, building, and equipment to be included in “assets restricted to investment in land, building, and equipment” rather than cash and contributions. Cash and equivalents of permanent endowment funds held temporarily until suitable long-term investment opportunities are identified must be included in the classification “long-term investments.” Other organizations provide liquidity information in the notes to the financial statements.