In classifying expenses in the statement of activities of a not-for-profit health care organization, all expenses are reported exclusively within the temporarily restricted category.

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Expenses in a not-for-profit health care organization are categorized as either unrestricted, temporarily restricted, or permanently restricted. Expenses that do not have any donor restrictions are reported within the unrestricted category, while expenses with donor restrictions that will be satisfied in the current fiscal year are reported within the temporarily restricted category. Expenses with donor restrictions that will be satisfied in future fiscal years are reported within the permanently restricted category. Therefore, not all expenses are reported exclusively within the temporarily restricted category.

In Classifying Expenses in the Statement of Activities of a Not-For-Profit