Question

balance sheet and will go a long way toward making this program a reality We were delighted to renew our no-cost lease with the Big Corporation for our administrative office space. The continuing support of Big Corporation helps us conserve our scarce cash resources. The fair value of this space is approximately $60,000 a year and represents revenue without donor restrictions to our organization and an offsetting expense. Choose an option below: O(Original text] The fair value of this space is approximately $60,000 a year and represents revenue without donor restrictions to our organization and an offsetting expense. ODelete Text OAlthough we appreciate Big Company's significant donation and it will help our budget, we do not report transactions of this type in our annual financial statements. O Big Company's gift, donor restricted as a practical matter to building occupancy expenses, will factor into our endowment performance. OBig Company's gift provides a $60,000 increase to the net assets of our organization. Cancel Reset Аcсept

Answer 1

In preparation of financial statements of non profit entities

net asset classes as: 1) net assets with donor restrictions, and 2) net assets without donor restrictions

net assets without donor restrictions subject to self imposed limits by action of governing board. board designated net assets may be earmarked for future programs, investments,contingencies, purchase or construction of fixed assets or other uses some governing boards may delegate designation decisions to internal management.such designations are considered to be included in board designated net assets.

and need to be presented in the balance sheet net assets with donor restrictions and without donor restrictions seperately

it is always important to classify whether it is temporarily restricted or permanently restricted along with amount, purpose and type of board designations need to be disclosed.

it is increase in value of net assets without donor restrctions and disclosed in balance sheet as

net assets

without donor restrictions

a. undesignated

b. designated by board for endowment