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financial reporting of any not-for-profit institution . Accounting for not-for-profit institutions differs greatly from accounting for a profit-oriented enterprise Cases CASE 13-1 DEFICIT BUDGET? In
financial reporting of any not-for-profit institution . Accounting for not-for-profit institutions differs greatly from accounting for a profit-oriented enterprise Cases CASE 13-1 DEFICIT BUDGET? In July 2003, the Medical College of Ohio (MCO) (now part of the University of Toledo) approved its first deficit budget of $3.4 million, but no programs or faculty members were cut. announced a "mission-based" study of all programs and an examination of how financially viable they are, as well as how essential they are. MCO depreciation expense, MCO would have a $5 million profit for fiscal year 2004. was projected to lose money because of recognizing depreciation expense. Without recognizing depreciation expense, MCO was adopting a new accounting standard d in 2000 that requires colleges (universities) to account for depreciation. Many col- leges adopted the new standard by disclosing in a note in their audited financial statements, not their operating budgets Required a. In your opinion, should colleges and universities recognize depreciation expense? Comment. b. I s recognizing depreciation expense in a note equivalent to recognizing depreciation expense in the statements? Comment. c. Should the standard be explicit on how a college or university recognizes depreciation expense? Comment. Note: Information relating to this case comes from "MCO Board Votes Its 1st Deficit Budget," The Blade, Toledo, Ohio, July 29, 2003, Section B, pp. 1-2. Source: "MCO Board Votes Its 1st Deficit Budget," The Blade, Toledo, Ohio, July 29, 2003, Section B, pp. 1-2 CASE 13-2 MY MUD HENS Toledo Mud Hens Baseball Club, Inc., is a not-for-profit organization that is a
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