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Measuring the Impact of Revenue Recognition on Not-For-Profit Organizations
Posted by Holly Perez on Thu, Nov 29, 2018 @ 10:48 AM

Not-for-profit organizations face a big question going into their next fiscal period: how will the revenue recognition standard affect the not-for-profit sector? The answer is: it depends.

If your organization uses a basis of accounting other than the U.S. generally accepted accounting principles (GAAP), such as a cash basis of accounting, then the changes to revenue recognition under ASC Topic 606, Revenue from Contracts with Customers will not impact your organization. Organizations that follow U.S. GAAP will have some evaluating to do, particularly if your entity receives a high volume of contributions, is a membership organization, or provides goods or services (such as by operating a gift shop). 

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Topics: Not-for-Profits, NFP, Holly Perez, Revenue recognition, ASC Topic 606

Guidance Issued Regarding Contributions Made and Received for Not-For-Profit Organizations
Posted by Holly Perez on Thu, Jun 28, 2018 @ 11:14 AM

On June 21, 2018 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions received and Contributions Made, which provides accounting guidance around contributions of cash and other assets received and made by not-for-profit organizations and business enterprises.

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Topics: Not-for-Profits, NFP, Holly Perez, FASB, Financial Accounting Standards Board, Revenue recognition, ASC Topic 606

Proposed ASU Aims to Clarify Revenue Recognition for Not-For-Profits
Posted by Michelle Spriggs on Thu, Aug 31, 2017 @ 10:39 AM

The Financial Accounting Standards Board (FASB) recently issued a proposed accounting standards update, Not-for-Profit Entities (Topic 958) Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made.  This proposed update is designed to clarify revenue recognition related to grants and contracts and contributions. Released in early August, the proposed changes would help not-for-profits evaluate whether grants and contracts meet the definition of nonreciprocal transactions, or contributions.  If transactions meet this definition, they would be excluded from ASU 2014-09 Revenue from Contracts with Customers, referred to as the new revenue recognition standard, and therefore require following of the contribution guidance. Alternatively, if a transaction meets the definition of a reciprocal transaction, or an exchange transaction similar to a contract with a customer, then the new revenue recognition standard would apply.

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Topics: not-for-profit, NFP, Michelle Spriggs, Revenue recognition, Revenue Recognition Standard, revenue recognition for nonprofits, nonprofit

Revenue Recognition: Government Grants and Other Provisions that May Impact Adoption for Not-For-Profits
Posted by Craig Gilman on Tue, Feb 28, 2017 @ 07:39 AM

All entities that have contracts with customers will be affected by the new revenue recognition standard, including not-for-profit organizations.

The Financial Accounting Standards Board (FASB)’s Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) creates a five-step revenue recognition model that replaces a rules-based approach with a principles-based approach. The changes are wide-ranging and will have more of an impact on commercial entities than the nonprofit sector, and not-for-profit organizations will have some exceptions to following the new standard. Contributions, for example, are scoped out of the changes. Nevertheless, other provisions of the new guidance could be of interest and should be considered carefully.

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Topics: not-for-profit, NFP, nonprofit, Revenue recognition, Revenue Recognition Standard, Government Grants

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