Temporary restriction definition
/What is a Temporary Restriction?
A temporary restriction is a stipulation attached to a donation that controls its use for a certain period of time. For example, a donor stipulates that only the interest on a $10,000 payment can be spent during the first year, after which the entire amount can be spent. These restrictions tend to be associated only with larger donations; nonprofits try to steer donors away from requiring such restrictions.
Accounting for a Temporary Restriction
When a nonprofit receives a donation that has a temporary restriction, it is recorded as an asset and as temporarily restricted contribution revenue.