The principal of a Private-Purpose Trust Fund

Question

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The principal of a Private-Purpose Trust Fund may be spendable or nonspendable in nature, depending on the terms of the trust agreement. Generally accepted accounting principles require that the distinction between spendable and nonspendable portions of the fund be clearly disclosed in the financial statements. The principal may not fall below a pre-determined threshold in either case, as this would risk the ability of the fund to fulfill its intended charitable purpose.

The Principal of a Private-Purpose Trust Fund