Colleges that use a fixed rate of return approach to manage the distribution of income from their endowments must apply the same rate to determine how much investment income to report in their financial statements.

Question

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Colleges that use a fixed rate of return approach to manage the distribution of income from their endowments can apply a different rate for financial reporting purposes. Financial statement reporting is governed by accounting standards, which may require the use of fair value or other methods to determine investment income, separate from the institution's endowment distribution policy.

Colleges That Use a Fixed Rate of Return Approach to Manage