Lesson: Components of the Statement of Financial Position

In this lesson, Nick Palazzolo, CPA, outlines the key components of the statement of financial position, correlating with the fundamental accounting equation. He dives into the nuances of net assets, differentiating between those with donor restrictions and those without. Nick concisely clarifies how restrictions on assets impact their categorization and the circumstances under which assets transition between categories. He also addresses common confusions around board designated funds and how they differ from donor-restricted assets. The explanation provided helps clarify these technical distinctions, ensuring a solid grasp of the elements that make up the statement of financial position.