When a donor-imposed restriction is satisfied, the related net assets are released from restrictions:

• A. As assets are spent for the purposes intended by the donor
• B. At the end of the reporting period
• C. When the donor approves expenditures
• D. When funds are invested

Answer: (A)

Donor-imposed restrictions are released when the restrictions are satisfied, meaning the organization has used the funds for the specific purpose or when the time restriction has expired. The related net assets are reclassified from restricted to unrestricted as the organization spends the restricted assets for the donor’s intended purpose. This reflects that the funds are now available for general use (unrestricted) once the donor’s conditions are met. For example, if a donor provides money specifically to support a program, the amount is released from restricted net assets to unrestricted net assets as expenses are incurred for that program. The other options don’t fit because end-of-period timing, donor approval, or investment activity alone does not satisfy the restriction.