In a not-for-profit (NFP) organization the amount of total assets minus total liabilities is actually reported as net assets in its statement of financial position. The net asset section for the NFP organization is divided into three classifications:
- unrestricted net assets
- temporarily restricted net assets
- permanently restricted net assets.
The changes in these net asset classifications are reported in the organization's statement of activities.
Gain unlimited access to our bookkeeping seminar videos, bookkeeping proficiency exams (and answers), bookkeeping cheat sheet, visual tutorials, and more—all designed to help you master valuable bookkeeping skills. Learn more about AccountingCoach PRO.