FASB clarifies how not-for-profits and others account for grants and similar transactions
Defining Issues | June 2018
KPMG reports on the FASB’s ASU that clarifies how not-for-profits and others account for grants and similar transactions. The ASU addresses practice issues by helping an entity evaluate whether it should account for a grant or similar contract as a contribution or as an exchange transaction.
Share
Applicability
- All entities that receive or make contributions, which primarily are not-for-profit entities, including healthcare entities.
Relevant dates
| Dates | Recipient transactions (revenue) | Resource provider transactions (expense) | ||
| Effective date: | Public* | All other entities | Public* | All other entities |
| Annual periods – Fiscal years beginning after | June 15, 2018 | December 15, 2018 | December 15, 2018 | December 15, 2019 |
| Interim periods – In fiscal years beginning after | June 15, 2018 | December 15, 2019 | December 15, 2018 | December 15, 2020 |
*Public: Public NFPs and public business entities
Key Impacts:
- Some grants that are considered exchange transactions under current US GAAP will be accounted for as conditional contributions
- Some grants that are considered contributions with no donor-imposed conditions under current US GAAP will be considered conditional
- The ASU is intended to reduce diversity in practice and enhance comparability among entities
Report contents
- Applicability
- Key facts and impacts
- Analyzing transactions under the ASU
- Determining whether a transaction is a contribution or an exchange transaction
- Determining whether a contribution is conditional
- Indicators of a barrier to entitlement
- Some judgment still required
- Disclosures about conditional promises to give
- Effective dates and transition
Download the document:
FASB clarifies accounting for grants
Download PDFExplore more
Financial reporting impacts of COVID-19
Guidance, updates and news covering financial reporting impacts of COVID-19
Defining Issues
Our collection of newsletters with insights and news about financial reporting and regulatory developments, incl. the Quarterly Outlook and FRV Weekly.
