If a private not-for-profit fails to comply with donor restriction on contributions received,the organization must accrue and disclose a contingent liability.

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Private not-for-profit organizations are required to comply with donor restrictions on contributions received. If they fail to comply with such restrictions, they must accrue and disclose a contingent liability in their financial statements. This is required under generally accepted accounting principles (GAAP) and ensures transparency and accountability in the use of donated funds.

If a Private Not-For-Profit Fails to Comply with Donor Restriction