Guidance for Contributions to Nonprofits to be Revisited
Unable to reach conclusions last month on its guidance for nonprofits regarding contributions and exchange transactions, the Financial Accounting Standards Board (“FASB”) is expected to continue to discuss the issue at future meetings.
The FASB’s Not-for-Profit Advisory Committee previously said that nonprofit organizations needed better guidance to comply with ASC 958-605 for contributions and the forthcoming requirements under Topic 606, Revenue From Contracts With Customers, for exchange transactions. Panel members said that accounting practices are usually inconsistent among nonprofits when determining if funds received should be treated as contributions or exchange transactions. Many organizations have had difficulty interpreting the guidance and there is diversity in practice.