Source: RSM US LLP.   

WHITE PAPER | September 14, 2023

In 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) to provide a robust framework and comprehensive principles for addressing revenue recognition issues. Additionally, the guidance on accounting for certain costs related to a contract with a customer in the scope of Topic 606 was codified in ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers.

The guidance in ASC 606 applies to contracts with customers. As such, it only affects the accounting for exchange transactions entered into by not-for-profit organizations. In some cases, determining whether a transaction entered into by a not-for-profit organization represents a contribution or exchange transaction can be complex.

In our white paper, Revenue recognition consideration for not-for-profit organizations, we discuss the following topics:

  • Scope
  • Subscriptions and membership dues
  • Tuition and housing fees
  • Assets and liabilities recognized under the new guidance
  • Disclosure requirements

For additional information about all of the revenue recognition guidance as well as numerous examples illustrating how to apply the guidance, refer to our publication, A guide to revenue recognition.

Source: RSM US LLP.
Reprinted with permission from RSM US LLP.
© 2024 RSM US LLP. All rights reserved. https://rsmus.com/insights/financial-reporting/changes-to-revenue-recognition-for-not-for-profit-organizations.html

RSM US LLP is a limited liability partnership and the U.S. member firm of RSM International, a global network of independent assurance, tax and consulting firms. The member firms of RSM International collaborate to provide services to global clients, but are separate and distinct legal entities that cannot obligate each other. Each member firm is responsible only for its own acts and omissions, and not those of any other party. Visit rsmus.com/about for more information regarding RSM US LLP and RSM International.