Final answer:
Investments of not-for-profit organizations must be reported at fair value based on the Financial Accounting Standards Board (FASB) guidelines.
Step-by-step explanation:
Investments of not-for-profit organizations must be reported at fair value.
Not-for-profit organizations are required to report their investments at fair value as per the Financial Accounting Standards Board (FASB) guidelines. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Reporting investments at fair value provides users of financial statements with relevant and reliable information about the organization's financial performance and position.
For example, if a not-for-profit organization holds stocks or bonds, the fair value of those investments would be reported based on their market prices. This ensures that the financial statements reflect the current value of the investments and allows stakeholders to make informed decisions.