By Helena Bouron, CPA, Senior Audit Manager
In August 2017, the Financial Accounting Standards Board (“FASB”) issued a proposed Accounting Standard Update (Update) to clarify existing guidance on revenue recognition of grants and contracts by nonprofit organizations.1
The changes in this proposed Update provide a more robust framework to determine when a transaction should be accounted for as a contribution under Subtopic 958-605 or as an exchange transaction accounted for under other guidance (for example, Topic 606). The proposed Update also provides important guidelines on whether a contribution is conditional or unconditional, which would help reduce diversity in practice and simplify the application of judgment, since current guidance is open to differences in interpretation. (more…)