How Should Outstanding Commitments Best Be Presented in the Financial

How should outstanding commitments best be presented in the financial statements of non- for-profit organizations that use encumbrance accounting?

A) The encumbrance should be reported as an expense and the estimated commitment as a liability.
B) The encumbrances should be reported as a deferred asset and the estimated commitment as a liability.
C) The estimated commitment should be reported as a liability with the encumbrance deducted from it on the face of the statement of financial position.
D) Neither the encumbrance nor estimated commitment should be included in the financial statements; if the commitment is sufficiently material, it could be disclosed in the notes to the financial statements.