Under USGAAP, why chould public companies add the percentage of the restricted net assets in their annual report? and why should they release the parent company financial statements if the percentage exceed 25%?
According to ASC 958-605-55-14, not-for-profit organizations, including public companies that operate in this context, are required to provide information about their restricted net assets. This is because donors, grantors, and other stakeholders need to understand how resources are designated and managed. When the percentage of restricted net assets exceeds 25% of the total net assets, it becomes significant enough to influence the understanding of the organization's financial position and performance. Therefore, the parent company's financial statements should be disclosed to provide a comprehensive view of the resources and constraints on those resources, enhancing transparency and enabling users to make informed decisions.
