Final answer:
Depreciation expense in a not-for-profit organization should be assigned to or allocated to the functions to which it relates and reported under the management and general function. It should also be disclosed in the notes to the financial statements.
Step-by-step explanation:
Depreciation expense in a not-for-profit organization should be This means that the depreciation expense should be assigned to the specific functions or programs that benefit from the use of the depreciated assets.
In addition, the depreciation expense should be reported under the management and general function in the financial statements. This category includes expenses related to the overall management and administration of the organization.
The depreciation expense should also be disclosed in the notes to the financial statements. The notes provide additional information and explanations about the organization's financial statements, including details about significant accounting policies and estimates.
However, for assets that are used for more than one function or are part of the general overhead, the depreciation should be allocated appropriately across different functions, including support services. It is also common for the full details regarding depreciation methods and amounts to be disclosed in the notes to the financial statements to provide additional transparency.