Foundation:Gentoo Foundation Finances FY2022

Financial statements of Gentoo Foundation Inc., FY2022

Period	2021/22
Period-Start	2021/07/01
Period-Ending	2022/06/30
Prepared-by	robbat2
As-of	2023/08/26 (rev 3b7e9a834280dc7d0cdd98750cf4d2638d92541f)

Disclaimers: Year-specific

• FY2022 closed & reviewed by accountant
• Income:Programs:GSOC: GSOC2021: ? students ($800), mentor travel reimbursement ($0), total $800.
• WIP:
  • bug & other tracking metadata not yet attached to all non-scheduled expenses or capital purchases

Disclaimers: Common

• The following statements have NOT been reviewed by a CPA
• The following statements represent a work-in-progress, with some known concerns:
  • Data capture:
    • In-Kind Donations has minimally started.
    • Donor Restrictions has NOT been started, but is expected to have minimal impact (see further remarks).
  • Incomplete historical capture due to lack of records
  • Depreciation: See seperate Concerns section under Further Remarks

Statement of Financial Position

USD 157,075.98 Assets USD -15,769.11 Accumulated-Depreciation USD -109.03 Banners:Purchased_GDS7_201811 USD -15,660.08 Computers:Infra USD -2,380.65 Purchased_GDS5_201710 USD -900.16 Purchased_GDS5_201803 USD -26.00 Purchased_GDS5_201804 USD -1,657.24 Purchased_GDS5_201812 USD -2,184.56 Purchased_GDS5_201907 USD -520.76 Purchased_GDS5_201911 USD -7,837.73 Purchased_GDS5_202203 USD -152.99 Purchased_GDS5_202206 USD 97,984.36 Bank USD 80,474.63 CapOne USD 28,236.95 Check7136 USD 52,237.68 Saving8438 USD 17,509.73 CapOneMoneyMarket USD 64,874.95 Capital USD 155.65 Banners:Purchased_GDS7_201811 USD 64,719.30 Computers:Infra USD 2,413.96 Purchased_GDS5_201710 USD 968.54 Purchased_GDS5_201803 USD 27.98 Purchased_GDS5_201804 USD 1,964.25 Purchased_GDS5_201812 USD 3,320.00 Purchased_GDS5_201907 USD 713.37 Purchased_GDS5_201911 USD 52,251.50 Purchased_GDS5_202203 USD 3,059.70 Purchased_GDS5_202206 USD 9,985.78 Paypal -------------------- USD 157,075.98

USD 157,075.97 NetAssets:RetainedEarnings USD -153,310.04 Expenses USD 310,386.01 Income -------------------- USD 157,075.97

Remarks

• See: [AC-NPO-2]

Statement of Activities

       USD 16,242.24  Income
          USD 255.75    Commission
       USD 14,985.72    Donations:Cash
          USD 139.87    Interest
           USD 87.41      CapOne:Saving8438
           USD 52.46      CapOneMoneyMarket
          USD 800.00    Programs:GSOC
           USD 60.90    Rebate
--------------------
       USD 16,242.24

USD 21,053.89 Expenses USD 1,500.00 Accounting USD 9,496.43 Depreciation USD 974.83 Fees USD 25.00 Bank USD 949.83 Paypal USD 4,259.74 Hosting USD 1,033.56 Amazon USD 3,226.18 Hetzner USD 342.30 Mail USD 436.31 Project:Nitrokey USD 38.89 Services USD 220.05 Shipping USD 3,785.34 Taxes:Federal:Income USD 4,892.15 BalanceDue USD 2,464.00 Estimated USD -3,570.81 Refunds -------------------- USD 21,053.89

Remarks

• See: [AC-NPO-2]

TODO: Statement of Functional Expenses

• See: [AC-NPO-4]
• TODO: reformat to columar style with TOTALS

Program: Dev

          USD 220.05  Expenses:Shipping

Program: Foundation

        USD 5,627.64  Expenses
        USD 1,500.00    Accounting
          USD 342.30    Mail
        USD 3,785.34    Taxes:Federal:Income
        USD 4,892.15      BalanceDue
        USD 2,464.00      Estimated
       USD -3,570.81      Refunds
--------------------
        USD 5,627.64

Program: Infra

        USD 4,298.63  Expenses
        USD 4,259.74    Hosting
        USD 1,033.56      Amazon
        USD 3,226.18      Hetzner
           USD 38.89    Services
--------------------
        USD 4,298.63

Program: Nitrokey

          USD 436.31  Expenses:Project:Nitrokey

Program: NONE

       USD 10,471.25  Expenses
        USD 9,496.43    Depreciation
          USD 974.83    Fees
           USD 25.00      Bank
          USD 949.83      Paypal
--------------------
       USD 10,471.25

TODO: Statement of Cash Flows

• Operating Activities
• Investing Activities
• Financing Activities

Capital Assets

Statement of Position

• This represents all Assets still in use.
• Assets (classes) that are present in this Statement of Position, but NOT in the Statement Of Financial Position are fully depreciated, and have a book value of $0.

              52 pcs  Virtual:Assets:Capital
               2 pcs    Banners
               1 pcs      Purchased_GDS7_200711
               1 pcs      Purchased_GDS7_200801
              50 pcs    Computers
              15 pcs      Dev
               1 pcs        Purchased_GDS5_200506
               1 pcs        Purchased_GDS5_200508
               2 pcs        Purchased_GDS5_200606
               1 pcs        Purchased_GDS5_200607
               1 pcs        Purchased_GDS5_200803
               1 pcs        Purchased_GDS5_200904
               1 pcs        Purchased_GDS5_200910
               1 pcs        Purchased_GDS5_201001
               1 pcs        Purchased_GDS5_201004
               1 pcs        Purchased_GDS5_201012
               1 pcs        Purchased_GDS5_201106
               1 pcs        Purchased_GDS5_201107
               1 pcs        Purchased_GDS5_201205
               1 pcs        Purchased_GDS5_201307
              35 pcs      Infra
               2 pcs        Purchased_GDS5_200705
               1 pcs        Purchased_GDS5_200905
               2 pcs        Purchased_GDS5_201003
               1 pcs        Purchased_GDS5_201107
               1 pcs        Purchased_GDS5_201110
               6 pcs        Purchased_GDS5_201111
               2 pcs        Purchased_GDS5_201112
               3 pcs        Purchased_GDS5_201202
               1 pcs        Purchased_GDS5_201206
               2 pcs        Purchased_GDS5_201411
               1 pcs        Purchased_GDS5_201412
               2 pcs        Purchased_GDS5_201502
               1 pcs        Purchased_GDS5_201606
               2 pcs        Purchased_GDS5_201710
               1 pcs        Purchased_GDS5_201803
               1 pcs        Purchased_GDS5_201804
               1 pcs        Purchased_GDS5_201812
               1 pcs        Purchased_GDS5_201907
               2 pcs        Purchased_GDS5_201911
               2 pcs        Purchased_GDS5_202203
--------------------
              52 pcs

Change of Position

2022/03/16       New computers for ganeti cluster at OSL: https://archives.gentoo.org/gentoo-project/message/35a3bd66aa5a6684fb481de468a4623c       (Virtual:Assets:Capital:Computers:Infra:Purchased_GDS5_202203)              1 pcs              1 pcs
2022/03/27       Network Hardware purchase for infra-refresh at OSUOSL.       (Virtual:Assets:Capital:Computers:Infra:Purchased_GDS5_202203)              1 pcs              2 pcs

Verification of closed accounts for EOY

• This section covers any accounts that aren't closed, correctness review (e.g. missing entry in closing transactions)

TODO: Notes to the Financial Statements

• (TODO FASB 2016-14 requirements)

Further Remarks

Contributions

• FASB 1993-06 / SFAS 116: "Accounting for Contributions Received and Contributions Made"
• FASB 2018-08: "Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made"
• FASB ASC 958-605: "Not-for-Profit Entities - Revenue Recognition"
  • This covers how contributions received must be accounted.
  • The Gentoo Infrastructure team recieves contributions in multiple non-cash forms:
    • Contribution of Assets
      • e.g. Hardware donated outright to the Foundation, and held by the Foundation.
    • Contribution of Utilities, covered by SFAS-116, example 9, paragraph 190 & 191
      • e.g. Server rackspace (including electricity & network connectivity)
    • Contribution of Use of Property, covered by SFAS-116, example 10, paragraph 192 & 193.
      • e.g. Use of dedicated servers

Depreciation

• See https://en.wikipedia.org/wiki/MACRS and [IRS-946] for more info.
• All relevant accounts are tagged with MACRS, and matching asset codes.
  • Capital value: Assets:Capital:{asset-code}
  • Depreciation Contra-asset: Assets:Accumulated-Depreciation:{asset-code}.
  • Inventory tracking: Virtual:Assets:Capital:{asset-code}
• All assets use the mid-quarter convention to avoid splitting the calculation between property that may use half-year convention vs property that must use the mid-quarter convention.
• The purchasing year & quarter is derived from the purchase date in the account name.
• Some assets are retained long past their depreciation period, as they are still functioning fine.
• Risks & Outstanding Issues:
  • There are no Section 179 elections in place for additional depreciation. This differs from the formal IRS filing, where the depreciation is chosen by the accountant for optimal tax handlng.
  • It is possible that some assets are in the wrong IRS asset class, per [IRS-946] Appendix B where the manner in which property is used can change it's lifecycle.
  • The exact location of non-US assets may impact the depreciation system. This is NOT considered at this time, as minimal assets are outside of the US.
• Example:
  • Assets:Capital:Computers:Infra:Purchased_GDS5_201411:
    • What is it? Computers:Infra tells us it is a computer or parts thereof used by Infra. (Computers:Dev would be used by a Developer)
    • What is the MACRS system & property class life: GDS5 GDS, with a 5-year class life.
    • When was it purchased? 201411
    • What is the depreciation value for this asset? See the Assets:Accumulated-Depreciation:Computers:Infra:Purchased_GDS5_201411 account
    • Is the asset still in use, or has it been disposed of? See the Virtual:Assets:Capital:Computers:Infra:Purchased_GDS5_201411 account, for quantity greater than zero.

Asset Classes in use

Account                        IRS-Asset-Class     GDS-Class-Life
Assets:Capital:Computers:*     00.12               5
Assets:Capital:Banners:*       00.11               7

FASB 2016-14

• FASB 2016-14 MUST be applied for all fiscal years starting after 2017/12/15, but the standard permits earlier application.
  • The treasurer has elected to apply the changes to ALL financial statements, as none of them have been formally audited at this time.
• Donor Restrictions
  • The earlier boards did NOT include any formal means for donors to restrict cash donations.
  • Some in-kind donations MAY have usage restrictions (e.g. bandwidth limitations, disclosure limitations), but are not expected to impact the financial statements at this time. This has not yet been confirmed with a CPA that specializes in NPO accounting.
• FASB 2016-14 changed the classes of Net Assets:
  • Before:
    • Permanantly restricted Net Assets
    • Temporarily restricted Net Assets
    • Unrestricted Net Assets
  • After:
    • Net Assets with Donor Restrictions
    • Net Assets without Donor Restrictions

References

• [FASB2016-14] UPDATE 2016-14—NOT-FOR-PROFIT ENTITIES (TOPIC 958): PRESENTATION OF FINANCIAL STATEMENTS OF NOT-FOR-PROFIT ENTITIES. http://fasb.org/cs/ContentServer?c=Document_C&cid=1176168381847&d=&pagename=FASB%2FDocument_C%2FDocumentPage
• [AC-NPO-1] Nonprofit Accounting Explaination (1): Introduction to Nonprofit Accounting. https://www.accountingcoach.com/nonprofit-accounting/explanation/1
• [AC-NPO-2] Nonprofit Accounting Explaination (2): Financial Statements of Nonprofits. https://www.accountingcoach.com/nonprofit-accounting/explanation/2
• [AC-NPO-4] Nonprofit Accounting Explaination (4): Statement of Functional Expenses. https://www.accountingcoach.com/nonprofit-accounting/explanation/4
• [IRS-946] How To Depreciate Property. https://www.irs.gov/pub/irs-pdf/p946.pdf