Question

The Victoria Fund, a child welfare fund, received $50,000 in cash in 2018. The donor requires the gift be held in perpetuity and that the income from investing this money may be used for its program of promoting adoption of young girls. How should the gift be reported in the Victoria Fund's financial statements?

Answer 1

The $50,000 must be reported as assets with donor restrictions.

Step-by-step explanation:

Donor imposed restrictions can be temporary or perpetual; the $50,000 are perpetually restricted since they must be invested and the income received should be used for its program of promoting adoption of young girls.