The Jones family lost its home in a fire. On December 25,
2012, a philanthropist sent money to the Amer Benevolent Society,
a not-for-profit organization, to purchase furniture for the
Jones family. During January 2013, Amer purchased this furniture for the Jones family. How should Amer report the receipt of the money in its 2012 financial statements?

(d) A liability (not revenue) is recorded when the
reporting entity acts as an agent or trustee. A recipient of assets
who is an agent or trustee has little or no discretion in determining
how the assets transferred will be used. The receipt of cash to
purchase furniture specifically for the Jones family would constitute
a “transfer” of assets. Upon receipt of the asset (cash), the
Amer Benevolent society must expend (i.e., purchase furniture)
the contribution to comply with the restrictions of the donor.
Answer (a) is incorrect because the donee restricted the use of
the contribution. Answer (c) is incorrect because a permanent
restriction stipulates that the resources be maintained permanently
(but permits the donee organization to expend part or all
of the income or other economic benefits derived from the donated
assets).