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Per FASB Standards, Not-For-Profits Must Classify Their Net Assets into Three

question 43

Essay

Per FASB standards, not-for-profits must classify their net assets into three classes. What is the basis for distinguishing the three classes? What is the rationale for this basis? How is each class defined?


Definitions:

Breach-Of-Contract

The failure to perform as stipulated by the terms of a contract, without lawful excuse.

Compensatory

Related to compensation, it often refers to damages awarded in a lawsuit that are meant to reimburse the plaintiff for actual losses or harms.

Trademark

A symbol, word, or phrase legally registered or established by use as representing a company or product.

Distinctive Mark

A unique symbol or feature that distinguishes a product, service, or entity from others.

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