On December 30 of the current year, Leigh Museum, a nongovernmental not-for-profit entity (NFP), received a $7 million donation of Day Co. shares with donor-stipulated requirements as follows: Shares valued at $5 million are to be sold, with the proceeds used to erect a public viewing building. Shares valued at $2 million are to be retained, with the dividends used to support current operations. As a consequence of the receipt of the Day shares, how much should Leigh report as net assets with donor restrictions on its statement of financial position for the current year?

Donor imposed restrictions can be temporary or perpetual; the $5 million in shares are restricted and should only be used for a building and the rest ($2 million) must be kept and their dividends should be used for current operations.

The whole $7 million have restricted uses, therefore they should all be reported as assets with donor restrictions.

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