What Is Functional Expense Allocation? Functional expense allocation is the process by which a nonprofit organization’s accountant or bookkeeper classifies each expense by its functional classification. To better grasp functional expense allocation, it helps to understand why it’s important for nonprofit...
As per Financial Accounting Standards Board’s requirement, a nonprofit organization is supposed to categorize the expenses on the basis of its purpose. Natural expenditure here tells us about where the money went in respect to what in return. Functional expense is the bigger plate here. It menti...