The Sutton Hoo Foundation holds $32,000,000 fair value in debt and equity securities as a result of a permanently restricted contribution it received in a previous year. During 2018, the Foundation has a net gain of $2 million and $880,000 of interest and dividend income on those investments. If the donor specified that investment income from the contribution should be used support historical research for the years 300-1100 AD, how should the Foundation, whose focus is on European history from 100 to 1800 AD, classify this income?

Question

Quizplus · Accepted Answer

The gain and the investment income should be reported in the statement of activities as increases in net assets with donor restrictions, because use of both is limited by donor-imposed restrictions.

The Sutton Hoo Foundation Holds $32,000,000 Fair Value in Debt