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

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