Source: RSM US LLP. PBMares is a member of RSM US Alliance.
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:
- Subscriptions and membership dues
- Tuition and housing fees
- Assets and liabilities recognized under the new guidance
- Disclosure requirements
This article was written by RSM US LLP and originally appeared on Sep 14, 2023.
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