If the donation is related to a business activity, it is included in the cost of the business activity, if not, it is included in other expenses. An unrestricted net asset is a net asset that results from the absence of any restrictions placed by the provider of the asset on the use and disposition of the asset provided or the economic benefits of the asset. It generally results from net inflows of funds from revenues from services rendered, sales of goods, dividends and interest received from unrestricted donations, and foreign investments, net of expenses incurred in connection with the aforementioned revenues. Restricted net assets are time-restricted or (and) use-restricted on the use of the assets or economic benefits derived from the assets by the providers of the resources of the private nonprofit organization or by the relevant national laws and administrative regulations. A time restriction requires that the resource can only be used within a specific time or after a specified date, and a use restriction requires that the resource be used for a specific purpose.
For example, a donor organization donates $500,000 to a local private non-profit hospital in 2009, but requires that the hospital can only be used for a specific purpose after 2010. It can be seen that the donor for the hospital when to use this donation set a time limit. If the donor donated funds to support the local private non-profit hospitals to treat the elderly cataract medical technology development, the funds can only be used for the purchase of medical equipment.