A nonprofit hospital's trustees designate $600,000 of the hospital's net assets without donor restrictions for the future acquisition of a new hospital wing. The trustees tell the hospital comptroller to purchase a separate certificate of deposit for it. How should the hospital record and report this investment?

Question

Quizplus · Accepted Answer

Nonprofit hospital balance sheets often show resources as "assets limited as to use" or "assets whose use is limited." These are designations of unrestricted resources that have been set aside either as a result of a contractual agreement with an external party other than a donor or as a result of an internal decision by a hospital's governing board.

A Nonprofit Hospital's Trustees Designate $600,000 of the Hospital's Net