CPA Business Analysis and Reporting (BAR) Question of the Day
Test your knowledge with a hand-picked multiple-choice question.
Beacon University, a nonprofit, received a 5,000,000 donor-restricted endowment requiring the principal be maintained in perpetuity to support scholarships. Due to market declines, the endowment's fair value at year-end is 4,700,000 (underwater). During the year, the board appropriated 200,000 for scholarships under its spending policy, but scholarships had not yet been awarded by year-end. Beacon follows FASB guidance, including ASU 2016-14 and UPMIFA. No other donor restrictions apply. The university seeks to present the year-end balances and activity properly on the statement of financial position and statement of activities.
Which classification is correct for year-end reporting?