Revenue recognition: Changes coming for not-for-profit organizations
In May, the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) issued substantially converged final standards on revenue recognition. The FASB’s Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), provides a robust framework for addressing revenue recognition issues and will replace almost all existing revenue recognition guidance in current U.S. generally accepted accounting principles (GAAP) upon its effective date. While current U.S. GAAP applicable to contributions received by not-for-profit organizations has been retained, the accounting for exchange transactions entered into by these organizations could be significantly affected by the new guidance.
Even though delayed effective dates are provided in the ASU, it is not too early to gain an initial understanding of how the revenue recognition for exchange transactions entered into by not-for-profit organizations could be affected by the new guidance. To help you gain this understanding, read our summary, Changes coming for not-for-profit revenue recognition, to learn about additional changes coming to other industries, and visit Revenue recognition: Industry insights.