Are grants subject to revenue recognition?
Nonprofits have received long-awaited clarification on a key accounting question from the Financial Accounting Standards Board (FASB). FASB released a final accounting standards update (ASU), Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. The ASU is intended to standardize how grants and other contracts are classified across the sector, as either an exchange transaction or a contribution.
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