FASB’s new revenue recognition standard creates specific challenges for not-for-profits that do not apply to for-profit companies.
Specifically, how do not-for-profits and their resource providers classify grants and contracts? Are they exchange transactions or contributions? The answer determines which accounting guidance they follow. In this podcast, Cathy Clarke, CPA, chief assurance officer of CLA, explains the special considerations not-for-profits need to keep in mind related to the revenue recognition standard. Clarke also is a member of the AICPA Not-for-Profit Advisory Council, the AICPA Financial Reporting Executive Committee, and FASB’s Not-for-Profit Advisory Committee.
What you’ll learn in this episode:
- How not-for-profits can get started if they are having difficulty getting their implementation off the ground.
- What prompted FASB to issue a clarification to the contributions guidance around grants and contracts.
- The meaning of the key terms “right of return” and “barrier.”
- Whether or not government grants will always be accounted for as nonreciprocal.
- How organizations can be more proactive in executing documents to get the accounting treatment they prefer.
Play the episode below: