Overview of UPMIFA accounting for endowments

Looking for a 400 word summary of how to account for permanent endowments?

Colette Kamps, CPA, has a great overview in her post Underwater with UPMIFA, at the Nonprofit GPS blog.

Highlight of the summary:

So at the end of the third year, the endowment balance is at $485,000.  Permanently restricted net assets would still remain at $500,000 (this amount doesn’t change).  The underwater portion of $15,000 would “sit” as a debit in unrestricted net assets until it is subsequently recovered with market gains. 

Check it out if you want to ‘get’ UPMIFA in just two minutes.

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