Funds set aside for a specific period of time or until a certain event. These funds can be established by a donor or the organization. FASB Accounting Fund is classified as temporarily restricted net assets. GASB Accounting Fund is classified as restricted expendable net position. Funds set aside by an organization’s Board, which maintains the power to release the restriction on principal spending. Additional reserve funds, and other unrestricted gifts are often used to set up this fund type. The Funds are held by Board resolution and therefore can have policies and procedures that allow withdrawal of principal. This fund is also referred as Board-Designated Funds. FASB Accounting Fund is classified as unrestricted net assets. GASB Accounting Fund is classified as unrestricted net position. GASB A corporation gives $5 million to a state university (recipient) with the stipulation that the Facts: university establishes an endowment, invest the gift, and maintain the principal intact in perpetuity. The investment income is to be used for scholarships for underprivileged students majoring in business or public administration. Permanent endowment (permanently nonexpendable addition to net position). Type: Restrictions: Purpose restriction - the requirement to invest the gift and the specified use of investment income Time restriction - the stipulation that the principal be maintained intact in perpetuity (can be expended) Recognize assets and revenues when the gift is received because at that time the Accounting: university begins to comply with the time requirement (to maintain the principal intact). The university should always report resulting net position or fund balance (principal) as restricted because of the purpose restriction and the time requirement (investment in perpetuity). GASB
Funds set aside for a specific period of time or until a certain event. These funds can be established by a donor or the organization. FASB Accounting Fund is classified as temporarily restricted net assets. GASB Accounting Fund is classified as restricted expendable net position. Funds set aside by an organization’s Board, which maintains the power to release the restriction on principal spending. Additional reserve funds, and other unrestricted gifts are often used to set up this fund type. The Funds are held by Board resolution and therefore can have policies and procedures that allow withdrawal of principal. This fund is also referred as Board-Designated Funds. FASB Accounting Fund is classified as unrestricted net assets. GASB Accounting Fund is classified as unrestricted net position. GASB Facts: A corporation gives $5 million to a state university (recipient) with the stipulation that the university establishes an endowment, invest the gift, and maintain the principal intact in perpetuity. The investment income is to be used for scholarships for underprivileged students majoring in business or public administration. Type: Permanent endowment (permanently nonexpendable addition to net position). Restrictions: Purpose restriction - the requirement to invest the gift and the specified use of investment income Time restriction - the stipulation that the principal be maintained intact in perpetuity (can be expended) Accounting: Recognize assets and revenues when the gift is received because at that time the university begins to comply with the time requirement (to maintain the principal intact). The university should always report resulting net position or fund balance (principal) as restricted because of the purpose restriction and the time requirement (investment in perpetuity). GASB
CH_08.01.01_Endowment_Accounting_FINAL.docx