A not-for-profit entity that receives a donation restricted for a specific purpose and meets the use restriction in the same reporting period reports

Question

Quizplus · Accepted Answer

When a not-for-profit entity receives a donation that is restricted for a specific purpose and meets the use restriction within the same reporting period, it can report the transaction in two ways: as revenues without donor restrictions, since the funds were used for their intended purpose within the period, or as revenues with donor restrictions initially and then recognize net assets released from restrictions when the funds are used for the specified purpose. Both approaches accurately reflect the fulfillment of the restriction within the same reporting period.

A Not-For-Profit Entity That Receives a Donation Restricted for a Specific