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Connection

4332

2015 Issue 3

AMP Assessment Center Network Continues to Expand

Holiday HoursJob Analysis Completed for Real Estate Licensure Exams

New Business

When our association management services division first begins working with new associations, we are often asked about using the cash vs. accrual basis of account-

ing. Many smaller or newer associations, especially if they are volunteer run, use the cash basis of accounting and question the appropriate time to transition to accrual.

The first step in making this decision is to fully understand each option.

For example, when an association with a calendar fiscal year holds an annual conference in December, the differences in cost and accrual accounting truly stand out. Using the cash basis, revenue would be recognized in October and November as registration money is received. Most expenses would be recorded in the following year when invoices from the hotel and other vendors are paid. If the same organization uses the accrual basis, all

Association Management Tips: Understanding Cash vs. Accrual Accounting

Scott Hermansen, CPA, Chief Financial Officer

CASH BASIS ACCRUAL BASIS � Revenue is recorded when received

� Revenue is recorded when it is earned

� Expenses are recorded when checks are generated

� Expenses are recorded when incurred

� Accounts Receivable and Accounts Payable are not needed, since income and expenses are handled as they come about

� A Statement of Financial Position or Balance Sheet tracks revenue (accounts receivable) and expenses (accounts payable) which are recorded before the actual transactions are completed

continued on page 2

New Business:

In general, AMP Management Services always recommends the accrual basis of accounting to our clients. It paints a much more accurate financial picture of the association, which leads to more informed decision making and

budgeting. Since we provide financial services for the associations we manage, our accountants are able to assist Board members in understanding financial reports and implications.

However, for smaller organizations with limited resources for financial man-agement, the cash basis will work well for the short term. Associa-

tion growth and an increase in events, services and/or products will eventually indicate a need to

transition to accrual.

(AOCNP®), Advanced Oncology Certi-fied Clinical Nurse Specialist (AOCNS®), Certified Breast Care Nurse (CBCN®) and Blood and Marrow Transplant Certified Nurse (BMTCNTM). AMP will also assist with development and administration of the Individual Learning Needs Assessment, a continuing com-petence measurement tool. For more information about ONCC and its certification programs, please visit www.oncc.org.

ONCCThe Oncology Nursing Certification Corporation (ONCC) is a non-profit organization that develops, administers, and evaluates programs for certifica-tion in oncology nursing. ONCC was incorporated in 1984 and administered its first certification examination, the Oncology Certified Nurse (OCN®) examina-tion, in 1986. Today, they offer eight credential programs and more than 37,000 nurses are currently certified by ONCC. ONCC has worked with AMP on several projects since 2008, but recently they selected AMP to provide ongoing examination services. Beginning in 2016, AMP will assist ONCC with the development of its six oncology nursing certification examinations: Oncology Certified Nurse (OCN®), Certified Pediatric Hematology Oncology Nurse (CPHON®), Advanced Oncology Certified Nurse Practitioner

revenue and expenses are recorded in December, the month of the actual event. The revenue brought in early is deferred to December and expenses are recorded in December and posted to accounts payable until they are paid off early the following year.

Using cash vs. accrual accounting can have a significant impact on how the financial statements reflect the association’s finances as well as how much time and effort is needed for accounting tasks. How do you decide which approach is best for your association?

CASH BASIS ACCRUAL BASISPROS

� Requires less time and accounting specialization

� Provides the most accurate continual financial picture of the association

� Allows year end books to be closed more quickly

� Is the most widely accepted method for large or medium-sized organizations

CONS � Provides a less accurate financial picture of each service and event, especially if they fall at the end of a month or fiscal year

� Requires a greater knowledge of accounting and a more sophisticated accounting system

� Can be more difficult for Board members and volunteers to read and understand financial reports

� Sometimes provides a distorted financial picture of each month and year because expenses can be realized after revenue

“Understanding Cash vs. Accrual Accounting” continued from page 1

www.goAMP.com

AMP extends warm wishes to everyone this holiday season. To allow our staff to

celebrate with their families, AMP offices and candidate sup-port center will be closed beginning at noon on December 23 - 26 and noon on December 30 - January 2. AMP test centers will be closed December 24 - 26 and December 31 - January 2.

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Holiday Hours

Job Analysis Completed for Real Estate Licensure Exams

As discussed in many past issues of the Connection newsletter, professional and legal guidelines in

the occupational testing industry require three important (and fully documented) steps to provide evidence of a content valid assessment process: 1) a job analysis, 2) an examination content outline based on the results of that job analysis, and 3) test items written and distributed across that content outline. The goal of the examination development process is for each item on the test to measure a specific knowledge, skill or ability related to a critical and relevant job task that is tied to the test content outline and, thus, back to the findings of the job analysis.

AMP works with 13 state real estate programs and has the responsibility for providing examinations reflective of current real estate practice. This year we completed a national job anal-ysis study to update the national real estate licensure examina-tions. The study resulted in minor but important changes to the test specifications for our entry-level multiple-choice examina-tion and our advanced-level simulation examination. Admin-istration of new examinations corresponding to the updated specifications will begin in the spring of 2016. Before imple-mentation in each state, an updated Candidate Handbook will be available through the Candidate section of our website. AMP will work with state agencies and approved real estate schools to communicate all changes prior to implementation.

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We look forward to seeing you at one of these upcoming On the Road events!

CLEAR Midyear Business Meeting Savannah, GA January 7–9

ABC Innovation in Certification Conference Denver, CO January 19–22

FARB Annual Forum Clearwater Beach, FL January 28–31

ABNS Spring Value Convening Meeting Las Vegas, NV March 3–6

ATP Innovations in Testing Conference Orlando, FL March 20–23

AMP Assessment Center Network Continues to Expand

AMP continually monitors test center utilization to ensure convenient service and scheduling for your testing

candidates. We are pleased to announce that we have recently added/expanded the following sites in the Assessment Center Network.

New Test SitesRaleigh (Six Forks), NC

Bandon, OR

Bellingham, WA

Alexandria, VA

Expanded Test SiteHonolulu, HI