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- What does the ECFA recommend in terms of an organization’s annual report? - When are...

- What does the ECFA recommend in terms of an organization’s annual report?

- When are contributed services recorded on financial statements?

- What is a temporary restriction?

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Answer #1

Temporary restriction: If the fund donor announce some conditions about the fund utilization, i.e. the funds must use for a particular purpose or program, then it is called as temporary restriction. Usually the restricted time period may be one year or less than one year. During this period the funds do not use for any other purpose other than purpose which he (investor/donor) mentioned.

The contributed services must be recorded in financial statements, on the names of:

  • contribution in materials and supplies
  • contribution in services
  • contribution in property.

Its recommendations are, the donations and contributed services must be recorded in the annual reports of each firm.

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