FASB issues new accounting rules for contributions and grants
Abstract: The FASB’s ASU No. 2018-08 provides much-needed clarification on the topic of accounting for contributions and grants. It lays out rules that will help nonprofits determine whether a grant or similar contract is indeed a contribution — and, if so, when they should recognize the revenue generated from it. This article discusses the origins of the update. It also covers the “provider” factor, what constitutes a conditional contribution, and the “simultaneous release” option. A sidebar highlights the new revenue recognition rules in ASU No. 2014-09, which addresses revenue from customer contracts.