Nonprofit Alert: FASB Proposes Improvements to Nonprofit Grant and Contribution Accounting

By John D'Amico  |  August 21, 2017

There has always been some “gray area” in determining whether a grant is an exchange transaction or a contribution – depending on whether the contributor/grantor (the resource provider) received something of approximate equal value in exchange for the resources transferred. This has resulted in difficulties and diverse reporting practices among nonprofit organizations.

In an effort to enhance and standardize this process, the Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU) intended to clarify and improve the accounting guidance for contributions and grants.

The proposed ASU provides clarifying guidance to help organizations evaluate whether the resource provider is receiving value in return for the resources provided. It also seeks to provide better guidance on whether a contribution is conditional or unconditional, and help better distinguish between donor-imposed conditions and donor-imposed restrictions.

For more details on FASB’s proposed ASU, click here.

For More Information

If you have any questions about how this proposed FASB ASU would affect your organization and its financial reporting processes – if implemented, please contact John D’Amico, CPA, Director with our Professional Standards Group at 212.710.1808 or via email; or any of our nonprofit professionals.

About John D'Amico

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John D'Amico, CPA, is a Partner within the Professional Standards Group at Marks Paneth LLP, which is responsible for monitoring quality control in the firm as mandated by professional standards. He specializes in pre-issuance reviews and inspections of nonprofit organizations, governments and Single Audits. Mr. D’Amico also provides consultation on accounting and attestation matters and tests and monitors the firm's quality review policies and procedures. He teaches continuing education classes for the firm and on... READ MORE +

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