A finished ACC-658 Topic 6 net asset classification worksheet example, classifying a museum's contributions by donor restriction, recording releases and handling a board-designated fund and a conditional grant correctly. Searches like "acc 658 topic 6 assignment example", "acc658 topic 6 sample" and "acc-658 topic 6 example" land here.
What a finished ACC-658 Topic 6 net asset classification worksheet looks like
The finished worksheet gives every transaction a row showing its class, its amount and the fact that decided it. In the illustrative year, unrestricted gifts of $900,000 go to net assets without donor restrictions. A $300,000 pledge payable over three years for general operations is recognized now and held with donor restrictions, since the payment dates carry an implied time restriction. A $500,000 gift for school programs is restricted, and the $320,000 spent on those programs during the year is released. A $1,000,000 gift to be held in perpetuity is recorded with donor restrictions. The board's transfer of $250,000 into a quasi-endowment stays without donor restrictions. A foundation's $200,000 challenge grant, payable only if the museum raises matching new gifts by a set date, is not recognized at all, because the condition has not yet been met.
How an ACC-658 Topic 6 example is structured
The worksheet opens with the two classes and the single question that separates them: did a donor impose a limit the museum cannot remove? A recognition step comes before classification, so each transaction is first tested for whether it is a contribution at all and whether it is conditional. The seven transactions then appear as rows, each with the donor's stipulation quoted or summarized, the class assigned and the amount. Releases get their own section, showing the $320,000 moving from with donor restrictions to without as school programs are delivered. The quasi-endowment is examined next, since its name suggests a restriction that does not exist. The challenge grant follows, with the barrier and the funder's right to withhold payment both named. The worksheet ends with year-end totals for each class, reconciled to the statement of activities.
Recognition tested before classification
Each transaction is checked for whether it is a contribution and whether it is conditional, because a conditional promise is not recorded until its barrier is overcome.
A pledge carrying an implied time restriction
The $300,000 operating pledge paid over three years is held with donor restrictions, since money not yet due cannot support the current year's activities.
Releases shown as they occur
Of $500,000 restricted to school programs, the $320,000 spent in the year moves to without donor restrictions, and the remaining $180,000 stays restricted.
A quasi-endowment that restricts nothing
The board's $250,000 fund is managed like an endowment and is still without donor restrictions, because the board that created it can spend it.
The challenge grant left unrecorded
A $200,000 match payable only if new gifts reach a target by a set date has both a barrier and a right of release, so it waits.
Class totals tied to the statement
Year-end balances for each class reconcile to the statement of activities, with contributions, releases and expenses on the lines where each belongs.
Where marks go in ACC-658 Topic 6
Classifying by the museum's intentions rather than the donor's stipulations is the error that costs most here, and the quasi-endowment is where it usually appears. Papers that record the board's $250,000 as with donor restrictions tell readers the museum has less freedom than it does, since the board could spend it at its next meeting. Recognizing the $200,000 challenge grant as revenue before the match is raised counts money the foundation has no obligation to pay. Recording the three-year pledge as unrestricted ignores the time restriction implied by future payment dates. Worksheets that record the school-program gift and never release the $320,000 spent leave restricted net assets overstated at year end. A classification with no fact cited in each row cannot be checked, and checking it is the first thing an auditor or a board member would do.
Get an ACC-658 Topic 6 example written to your instructions
Send the ACC-658 Topic 6 instructions, the rubric in your classroom and the organization and transactions your section assigned. A custom example is written to those criteria, with recognition tested before classification, every contribution classified by the donor's terms, releases recorded, board designations handled correctly and totals tied to the statement, in 24 to 48 hours. The first is free.
ACC-658 Topic 6 questions, answered
What makes a contribution conditional?
Two features together: a barrier the organization must overcome, such as raising a matching amount or reaching a stated milestone, and a right of return or release, meaning the donor gets its money back or is freed from paying if the barrier is not met. Until the barrier is substantially overcome, nothing is recognized. A purpose restriction alone does not make a gift conditional; it limits use, and the gift still counts once promised unconditionally.
Why are all expenses reported without donor restrictions?
Because spending is recorded where the organization's own discretion sits, and restricted money becomes available to spend only when released. When a purpose-restricted gift is used for that purpose, the amount is reclassified from with donor restrictions to without, and the expense is reported there. Keeping expenses in one class means the statement of activities shows releases explicitly, which lets a reader see restricted money being used as intended.
Is an endowment always restricted?
Not always. A donor-restricted endowment, where the donor requires the gift to be held in perpetuity, is reported with donor restrictions. A board-designated fund, often called a quasi-endowment, is managed like one but remains without donor restrictions, because the board could decide to spend it. Many organizations hold both, and the worksheet should show them on separate lines so readers do not mistake one for the other.