How to account for losses on endowment investments
Abstract: In today’s market, a nonprofit is likely to be recording losses on their investments instead of gains. For their unrestricted investments, the organization records those losses — both unrealized and realized — in an unrestricted fund. But, for permanently and temporarily restricted endowment fund investments, it’s more complex. This article discusses the basics of accounting for losses and offers a scenario. A sidebar defines particular types of endowments.