Where should be endowment contributions presented in the financial statements of a not-for-profit organization under the deferral method?

Question

Quizplus · Accepted Answer

Under the deferral method, endowment contributions are temporarily restricted until the earnings from the endowment are expended. Therefore, these contributions should be reflected in the statement of changes in net assets as an increase in temporarily restricted net assets. Once the earnings are expended, the related expenses will be recorded and the temporarily restricted net assets will be released to unrestricted net assets.

Where Should Be Endowment Contributions Presented in the Financial Statements