| As we all know, the meaning of the term Nonprofit Institutions (NPIs) is very comprehensive, which means all the organizations that are not run for the maximum profit, excluding governments and enterprises. We can see by the name that NPI are run not for the profit, that is to say, they are the organizations for public interest and mutual interest with the support of public. In recent years, NPI play an active role in the areas of education, environmental protection, scientific research, culture and public health, poverty alleviation, and social services, and so on. Accordingly, the status and role of NPIs have attracted more and more attention by all walk of society.Since the 1980s, with the deepening of reform and opening to the outside world, NPI in China have been developing very fast, and it plays very important role in the areas of economy, policy and society. But "its role is not far enough as with its potential, compared with that of developed countries, with the burgeoning market economy, with its demand in China, with the status quo in China." (wenhui weekly news, 2006) . The problems will not only affect the development of NPI, but also affect China's economy and politics. Wang jian Qin said (2003, p1): " in social area, the practice of human being indicated time and time again that market economy and democratic politics will not run effectively with out the healthy social area. Now China has entered a turning period, without the drastic change in social area, marketization and the construction of democratic in our country will not develop further, that is to say, the reform in social area has become the key factors in promoting the overall reform in China."According to the John Hopkins Comparative Nonprofit Sector Project (CNP), besides social and political influence, the nonprofit sector is firstly a major economy force, which holds quite a substantial percentage in employment and expense. Even when we put religion organizations out of the equation, in 1995, in 22 countries including US, UK, France and Germany, the nonprofit sector has produced a total output of over 1.1 trillion dollars, and employed 19 million equivalents of full-time workers. The nonprofit sector's spending in these countries has reached 4.6% of the total GDP; the employment is close to 5% of the total non-agriculture employment, 10% of all service employment, and 27% of all public sector employment. If the nonprofit sector of these counties is to be considered as a single county, it would rank as the 8th largest economy in the world, higher than Brazil, Russia, Canada and Spain.Therefore, with the rapid development of nonprofit organizations, it is important for us to understand the scale, type, structure and the expense/income of them, and the relative performance and impact in different countries and areas. What are the differences among the NPIs, the government and enterprises? What's the relationship among them? What kind of relationship can promote the development and the function of the NPIs? And so on. In order to do these researches, we have to establish a well-constructed accounting system for nonprofit institutions, so as to enable the data collecting and decision making process. However, because the current system of national accounts (SNA-1993) did not expect the rapid emergence of nonprofit institutions, it did not put enough consideration on this sector. This problem can be shown by the following aspects (Helmut K. Anheier and Lester M. Salamon, 1998; United Nations, 2003):1. The setup of sectors. SNA-1993 and ESA-1995 have put all nonprofit institutions into 5 sectors: non-financial corporation, financial corporation, general government, household and nonprofit institutions serving households. Because that there is not a dedicated nonprofit sector, it is impossible to obtain a complete general statistics of nonprofit organizations.2. Classification systems. Both ISIC (International Standard Industrial Classification of All Economic Activities) and COPNI (Classification of the Purposes of Nonprofit Institution Serving Households) cannot effectively classify nonprofit activities. ISIC does not classify nonprofit sectors detailed enough (like education, health-care and social works), which cannot support in-depth research. And COPNI is designed with only the NPIs serving households in mind, making it unsuitable to apply to other nonprofit activities.3. The contents of accounting. SNA-1993 did not take the non-market output by market NPIs into consideration. Also, a major part of nonprofit activities—volunteer labor, is not taken into accounting. This does not only result in a lose of the total economy, but also compromised the research of nonprofit organizations. As the development of NPIs, this problem became impossible to be overlooked.4. Data collection. When collecting NPI data using the current national accounting system, the following problems exists: First, a large portion of NPI data is hidden in other organizations (like companies or government); Second, some important indicators, such as volunteer labor and government support, cannot be acquired; Third, many NPI output and capabilities are accounted with physical indicators, which are not included in the current accounting system.For the reasons mentioned above, based on past researches, this paper systematically investigated the nonprofit accounting theory, method and application. We first analyzed the limitations of the current nonprofit accounting systems. Then, we discussed the theoretical and conceptual basis of nonprofit sector accounting. And finally, we investigated the structure and data sources of the satellite accounts. This paper's focus comprises the accounting objects, variables and data sources of nonprofit accounting in China, and we try to provide a necessary data and information basis for the management and policy-making for China's nonprofit sector.The preface firstly explained the background and purpose of this research. Then it put forward past researches on this topic and problems need to be addressed. Finally, it briefly introduced the contents and laid down the infrastructure for this paper.Chapter 1: Proposal of NPI satellite accountsBased on past researches (United Nations, 2003; Helmut K. Anheier and Lester M. Salamon, 1998, etc), in this chapter, we analyzed SNA-1993, ESA-1995 and the defects and disadvantages of the accounting system of NPIs in China; after comparing "income source definition" and "structural-operational definition", we suggested a way to improve nonprofit accounting and the need for general accounting. That is to say, to establish satellite account for NPIs of China based on the account of governmental sector. Finally, we talked a little about the progress of satellite accounts for NPIs.Chapter 2: Concept of NPI accountingIn the chapter, we did the comparative study for different kinds of definitions and categories for the account in NPIs given by the researchers. It includes the legal definition of NPIs, the definition of income sources, the functional definition and the structural-operational definition. And it reviewed the classification method of ISIC, NACE, NTEE and SNA-1993, and the setup of ICNPO classification.UN's "Handbook on Nonprofit Institutions in the System of National Accounts (2003)" is the only nonprofit accounting system that is accepted globally now. It is based on a series of researches, tests, case studies and discussions. Therefore, it can be viewed as the top standard for NPI accounting today. Hence, the research on nonprofit accounting should focus on this handbook, we did the systematic analysis and review for the concept of handbook. Chapter 3 & 4: The setup of variables in NPI satellite accountsChapter 3 first discussed the theoretical basis of variables in NPI satellite accounts. And then analyzed its theoretic background, the aim of which is to explore their theoretic and practical issues, and what kind of variables is most suitable in China. Thus, chapter 3 introduced the variables of nonprofit accounting in SNA-1993, and focused on NPI-specified variables: the non-market output of market NPIs, volunteer labor and detail on government payments. Chapter 4 focused on the extended variables of NPI satellite accounts. This includes the structure variable, the clients' variable, the output & capabilities variable and the performance & impact variable. It's safe to say that these extensions enabled us to better describe the activities, functions and fragility of nonprofit institutions.Chapter 5: The table and practice of NPI satellite accountsIn this chapter, we discussed the tables for NPI satellite accounts, and the compiling process of these satellite accounts. The handbook suggests that the table system can be divided into 3 parts: the fully elaborated satellite account, the short form and the extended satellite account.As for the compiling of these satellite accounts, 3 steps are often taken: First, through modifying the current SNA-1993 definition and classification for NPIs, the accounting of NPIs serving households is transformed into the general accounting of nonprofit sector. Second, extra data are introduced to reflect the unique features of NPIs. Third, we go beyond the SNA-1993 structure to describe the features of nonprofit institutions such as the structure, clients, output & capabilities, performance & impact. Finally, some extended researches in done from there.Chapter 6: The data sources of NPI satellite accountsThis chapter discussed the problems with data sources in satellite accounts in detail. The focus is how to establish a NPI registering system to identify NPIs in current investigation system, and how to obtain necessary information from currently available data. This chapter also reviewed some experiences of several counties on collecting NPI data and some possible data sources, and discussed how these sources should be used in the compiling of these satellite accounts.
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