Nonprofits: Are you ready for the new contribution guidance?
Many nonprofits are unsure how to account for grants and similar contracts, especially when they come with donor-imposed conditions. Accounting Standards Update (ASU) No. 2018-08 provides much-needed clarity on contributions made and received. Effective for calendar-year 2019, the ASU will help nonprofits determine whether a grant or similar contract is indeed a contribution. And, if it is, the ASU will guide when they should recognize the revenue associated with it. The new guidance is expected to cause nonprofits to classify more grants and similar contracts as contributions than they did under the previous guidance. Contact us to evaluate what that means for your organization.