ASNPO Flashcards
Contributions — revenue recognition
Financial Reporting (ASNPO)
Contributions — revenue recognition (ASNPO)
* Contributions of materials and services can be recognized only when fair value can be reasonably estimated and when the materials and services are used in the normal course of operations and would otherwise have been purchased.
* Fair value of assets is estimated using market or appraisal values. Fair value of contributed materials and services is determined by comparing to the purchase of similar materials and services.
* Recognition of contributions is not required; however, the criteria for recognition must be met if an NPO wishes to record contributions. Once an accounting method has been determined, it must be applied consistently to all periods and for all types of contributions.
* The nature and amount of the contributions must be disclosed in the financial statements.
Restricted contributions — deferral method
* Funds are not recognized as revenue until they are used.
* If the funds are used for capital assets that are amortized, they are deferred and recognized over time.
* Contributions are recognized as deferred contributions on the financial statements.
Restricted contributions — restricted fund method
* At least one restricted fund, and one general fund, must be used.
* Contributions in the restricted fund can be recognized as revenue upon receipt.
