Suppose that you are the independent auditor for a local performing arts associa

Question

Suppose that you are the independent auditor for a local performing arts association (either government or not-for-profit) that recentlly received a sizable endowment. The association's president has asked whether gains, both realized and unrealized, from the appreciation of endowment investments should be accounted for as expendable or nonexpendable Suppose that you are the independent auditor for a local performing arts association (either government or not-for-profit) that recentlly received a sizable endowment. The association's president has asked whether gains, both realized and unrealized, from the appreciation of endowment investments should be accounted for as expendable or nonexpendable

Explanation / Answer

it should depend on the desire of the contributor set forth at the time of agreement which establishes the endowment that an investment gain whether realized or unrealized will be reported as expendable or nonexpendable.

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