Although Save the Children does not own any buildings, it does lease space for its soup kitchens and management offices. Save the Children has several noncancellable lease agreements that terminate December $31,2028.$ Minimum rentals under these leases are as follows:

Year Ending December $31$:

$2025$

$$20,000$

$2026$

$21,000$

$2027$

$22,000$

$2028$

$23,000$

Total

$$86,000$

Save the Children reports its remaining lease payments here in the notes, but it also reports these future payments on the balance sheet. The Financial Accounting Standards Board $($FASB$)$ requires that not$-$for$-$profits report these leases as an asset that the organization has a right$-$to$-$use and an offsetting liability for the present value of the payments to exercise that right$-$to$-$use.

What would the balance sheet look like if instead of renting property, Save the Children owned property? It would report an asset for the property and a liability for any borrowing associated with the acquisition. By requiring not$-$for$-$profits to treat finance leases in a similar manner allows a more direct financial comparison between organizations that own versus those that lease property.

Note H: Net Assets with Donor Restrictions

Net assets restricted to purpose or time were available for the following purposes at December $31,2024$ and $2023$:

$2024$

$2023$

Children$$s Outreach Program

$$4,000$

$$1,000$

Building and Equipment

$900$

$900$

$$4,900$

$$1,900$

Net assets were released from restrictions during $2024$ and $2023$ by incurring expenses satisfying restricted purposes. Net releases were as follows:

$2024$

$2023$

Satisfaction of Program Restrictions

Used to provide meals

$$10,000$

$ $2,000$

Used to acquire delivery van

$$

$8,000$

Subtotal

$$10,000$

$$10,000$

Expiration of Time Restrictions

Bequest to be used over $10$ years

$ $1,000$

$ $1,000$

$2023$ donation for use in $2024$

$1,000$

$$

$ $2,000$

$ $1,000$

Total Net Assets Released from Restrictions

$$12,000$

$$11,000$

$2024$

$2023$

Invested permanently with income to be used for any organizational purposes:

$$30,000$

$$27,000$

The note related to restricted net assets for St$.$ Jude Children$$s Research Hospital & American Lebanese Syrian Associated Charities in its $2020$ annual report is shown in Box $14-11,$ altered to reflect new accounting standards.

Note I: Inventory

If the FIFO method of inventory had been used, inventories would have been $$1,000$ and $$900$ higher at December $31,2024$ and $2023,$ respectively.

This note allows a financial statement user to convert income and assets calculated on a LIFO basis to what it would have been if the organization used FIFO, thus making comparison between organizations easier.