Avoiding Management Letter Comments – Net Asset Classification

Share Button

A common management letter comment stems from the misclassification of net assets. There are three main classifications of net assets: unrestricted, temporarily restricted, and permanently restricted. Unrestricted net assets are not subject to donor restrictions. Temporarily restricted net assets are subject to donor imposed restrictions that will either be met by actions of the organization and/or the passage of time (i.e. the donor wants their funds to go to a specific program or year). Permanently restricted net assets (also referred to as endowments) are subject to donor imposed restrictions that neither expire by the passage of …read more

Read more here: Nonprofit

About Aronson LLC

Aronson LLC has written 575 post in this blog.

Aronson LLC has been thinking ahead for its clients for more than 50 years. Aronson’s construction, real estate, government contracting, nonprofit, technology and private industry experts provide innovative audit, tax, and consulting services that help its clients move to the next level. From start-up to exit strategy, Aronson works with companies throughout the entire business lifecycle by proactively identifying opportunities and addressing challenges so that clients are able to focus on their core business. Aronson shows companies how to rethink everything to be more profitable, more competitive and better prepared for the future.

Share Button