Preview of Article:
The ABC’s of Accounting For Grants, Pledges, and Contributions
By Eric Fraint, President
Your Part-Time Controller, LLC
Good news! Your organization just received a major pledge or grant. Now you must determine how to account for it correctly in your financial records. Is it revenue, or not? Is it restricted or unrestricted? To make these decisions, you must ask a series of specific questions to arrive at the correct answer. This article will explain these questions and their ramifications.
The key accounting rule governing this topic is Statement of Financial Accounting Standards No. 116 issued by the Financial Accounting Standards Board: “Accounting for Contributions Received and Contributions Made.”
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