A recipient that receives funds before
the condition is met should initially re-
cord it as a refundable advance a li-
ability. Once the condition is met, the
liability account can be debited and
the revenue account credited.
Proposed Accounting Standards Up-
date Not-for-Profit Entities (Topic
958) should enhance guidance to re-
source provider and recipient entities
to help distinguish exchange transac-
tions from contributions. Exchange
transactions should be recorded in
situations where the provider and re-
cipient receive commensurate eco-
nomic value. When a contribution is
unconditional, revenue is recognized
immediately. Contributions with barri-
ers imposed by the resource provider
are considered conditional (and the
revenue deferred) until the terms of
the barrier are met. Once contribution
revenue is recognized, it will be either
unrestricted or restricted depending
on the donor's specifications.
Michael J. Rolleri is an associate
professor of accounting and ac-
counting department chair at the
University of New Haven and a part-
ner with Whelan Rolleri & DePietro
in Stratford. He can be reached at
Robert Wnek, J.D., LL.M. is a pro-
fessor of taxation and business law
at the University of New Haven.
He can be reached at RWnek@
FASB Not-for-Profit Accounting Standards Update
Thursday, May 10 · 8:30 - 10:00 a.m.
CTCPA Education Center, Rocky Hill
The CTCPA Not-for-Profit Organizations Interest Group meets
throughout the year to discuss topics including accounting, auditing,
taxes, and financial reporting for not-for-profits.
Join us on May 10 for in-depth discussion of FASB's Proposed
Accounting Standards Update Not-for-Profit Entities (Topic 958):
Clarifying the Scope and Accounting Guidance for Contributions
Received and Contributions Made.
Want to learn more?
Attend the next CTCPA
Interest Group meeting.
Register at www.ctcpas.org/groups.
Learn more about our member groups on page 8 of this issue.