What is Net assets with donor restrictions?
In short
Net assets with donor restrictions are the part of a not-for-profit organization's net assets subject to donor-imposed limits on when or how they may be used, including amounts to be held in perpetuity.
Key takeaways
- When a restriction is met, the amount is reclassified to net assets without donor restrictions as a release.
- All expenses are reported in net assets without donor restrictions.
- Board designations are not donor restrictions.
Where it's tested
FAR: Not-for-Profit Accounting — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A not-for-profit organization classifies net assets into how many categories?