The major difference between a private and public sector organization is that public organizations are owned or controlled by governments, while private organizations are not owned or controlled by governments. Due to this situation, there is no identifiable individual or group of stakeholders who hold a legal and eforceable claim to the net assets of a government and not-for-profit organization.
Public sector organizations are government owned or are under government authority, and operate to serve the public. Private sector organizations are not government owned or under the authority of the government, and can be either private businesses or not-for-profit organizations. Not-for-profit organizations operate for a purpose rather than a profit. Like the public sector, they do not have residual owners that profit from operations, but instead have "investors" such as donors, volunteers and members that often place restrictions on what the money is to be used for.
Looks like I missed the boat here a little bit. I'll definitely post sooner because everything is pretty much answered. I'll just include a couple thoughts I had.
Public companies reflect the desire of the general public, while private companies reflect the desires and actions of an individual or a group of individuals. Therefore the controls and reasons for accounting are different.
Additionally, an organization is considered governmental if it meets one or more of the following: 1. It has popular election of it's officers, or has appointment of the controlling majority of its members of its governing body by at least one state or local government. 2. If the organization dissolves, the net assets will go to a government. 3. It has the power to tax backed by law. 4. If it has the ability to directly issue debt with the interest paid being exempt from federal taxation.
The major difference between a private and public sector organization is that public organizations are owned or controlled by governments, while private organizations are not owned or controlled by governments. Due to this situation, there is no identifiable individual or group of stakeholders who hold a legal and eforceable claim to the net assets of a government and not-for-profit organization.
ReplyDeletePublic sector organizations are government owned or are under government authority, and operate to serve the public.
ReplyDeletePrivate sector organizations are not government owned or under the authority of the government, and can be either private businesses or not-for-profit organizations.
Not-for-profit organizations operate for a purpose rather than a profit. Like the public sector, they do not have residual owners that profit from operations, but instead have "investors" such as donors, volunteers and members that often place restrictions on what the money is to be used for.
Looks like I missed the boat here a little bit. I'll definitely post sooner because everything is pretty much answered. I'll just include a couple thoughts I had.
ReplyDeletePublic companies reflect the desire of the general public, while private companies reflect the desires and actions of an individual or a group of individuals. Therefore the controls and reasons for accounting are different.
Additionally, an organization is considered governmental if it meets one or more of the following:
ReplyDelete1. It has popular election of it's officers, or has appointment of the controlling majority of its members of its governing body by at least one state or local government.
2. If the organization dissolves, the net assets will go to a government.
3. It has the power to tax backed by law.
4. If it has the ability to directly issue debt with the interest paid being exempt from federal taxation.