Restricted Fund Method
* Organizations that follow restricted fund method present a general fund and one or more restricted funds. * The main purpose of the restricted fund is to record the receipt and the use of the resources from that fund that are subject to restrictions. * This method requires that a general fund be used to report changes in unrestricted net assets. Recognition of endowment contributions:
* The endowments contributions are recognized as revenue of the endowment fund in the current period. * The only revenue that is reported in the endowment fund is the endowment contribution and the net investment income that is subject to external restrictions. * Any allocation of internal resources to the endowment fund would be accounted for as interfund transfers. * The endowment fund balance at the end represents the accumulation of resources subject to both external and internal restrictions and they should be permanently maintained. * Net investment income earned on resources held for endowments would be recognized based on if the investment income is restricted or not. Recognition of Restricted Contributions reported in restricted funds: * Restricted contribution for which a restricted fund is present should be recognized as revenue of that fund in the current period. * There can be more than one restricted fund. However, each restricted fund would accumulate resources that are restricted for similar purposes. * Contributions that are restricted should be accounted for the same way on consistent basis. A change in restricted fund is considered to be a change in accounting policy. * The restricted fund balance at the reporting date represents the accumulation of resources that are subject to restrictions. * Any allocations of internally restricted resources to a restricted fund are known as interfund transfers. Recognition of Restricted Contributions reported in General funds: * Restricted...
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