At the end of 2020, a donor contributed equity securities worth $600,000 to Habitat for Humanity, with the stipulation that the shares be retained intact, and any investment income be used to support building projects in inner city neighborhoods in Chicago, IL. The shares declined in value by $10,000 during 2021. How is this unrealized loss reported in Habitat for Humanity's 2021 statement of activities?

Question

Quizplus · Accepted Answer

The unrealized loss is reported as a decrease in net assets with donor restrictions because the donor specified that the shares must be retained and the income used for a specific purpose.

At the End of 2020, a Donor Contributed Equity Securities