EndowmentAccounting-TheCaliforniaStateUniversity.docVIP

Chapter 8.6 Attachment D Endowment Accounting Overview An endowment is a proper transfer of money and/or property donated with the intention to support the University and its discretely presented component units in perpetuity. Ed code 89721 mandates the University (only) that endowment funds received be deposited into and maintained in local trust accounts (CSU Fund 466, Endowment Trust) by the University. For discretely presented component units, these funds are recorded in CSU Fund 921. Endowments may come with stipulations regarding its usage (by donor or trustees). There can be an undesignated endowment fund or a number of restricted endowment funds. Sources of Endowment Original gift Net appreciation( realized and unrealized) Interest/dividends Definition and Accounting of Different Endowment Types True Endowments Established when the donor states that the gift is to be held permanently as an endowment as identified in a written gift agreement or the organization restricts it for a specific use as solicited from donors. The original funds and any additional principal cannot be withdrawn, expended, or otherwise exhausted. FASB Accounting Fund is classified as permanently restricted net assets. GASB Accounting True endowment is also referred to as permanent endowment. Fund is classified as restricted nonexpendable net position. Term Endowments Funds set aside for a specific period of time or until a certain event. These funds can be established by a donor or the organization. FASB Accounting Fund is classified as temporarily restricted net assets. GASB Accounting Fund is classified as restricted expendable net position. Quasi Endowment Funds set aside by an organization’s Board, which maintains the power to release the restriction on principal spending. Additional reserve funds, and other unrestricted gifts are often used to set up this fund type. The Funds are held by Board resolution and therefore can have policies and procedures that allow withdrawal