A not-for-profit organization is not required to capitalize and amortize its capital assets if the organization ________.

Question

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According to generally accepted accounting principles (GAAP), a not-for-profit organization is not required to capitalize and amortize its capital assets if the organization has a two-year average annual gross consolidated revenues of less than $500,000. This exemption is provided in order to reduce the financial reporting burden on small not-for-profit organizations. Option A and D are not relevant to the decision to capitalize and amortize assets, while option C does not consider gross consolidated revenues.

A Not-For-Profit Organization Is Not Required to Capitalize and Amortize