NPLs apply different accounting obligations to contributions and scholarships. Contributions are part of ASC 958 theme “Not-for-profit entities”. The exchange is subject to other policies, for example.B. ASC Topic 606, “Revenue from contracts with customers”. The application of these different rules has an impact on the compensation of turnover; Unconditional contributions are recognised in the period in which assets or certain assets are received or pledged, while exchanges are recognised as turnover when performance obligations are met. ASU 2018-08 modifies the argumentation process behind the classification of transactions whose nuances can influence the timing of the realization of the turnover. Contributions and scholarships are subject to different accounting statements and may therefore be recorded during different billing periods and require different information. Kappa University is conducting a capital campaign to raise funds for the replacement of a dilapidated building on campus. Only one donor put a $6 million contribution into a trust, limited to the construction of the new building.

The release of this gift depends on the university receiving and collecting at least $6 million in other limited contributions to the construction of the building within six months of the date of the grant. Kappa University must collect the appropriate $6 million in contributions before the gift is transferred to the person. The entire gift is returned to the person if the university does not collect the corresponding $6 million in contributions. The contribution agreement prohibits the award of the grant on a pro rata basis. (For example, if the university earns $4.5 million, it is not entitled to 75% of the contribution.) Bravo Corporation (Bravo), a manufacturer of industrial products, committed 750,000 $US for the event. The guidance document required ABC to perform certain activities, all consistent with normal operation. ABC has agreed to identify Bravo on its website and in other communications as a sponsor of the event and to allow Bravo to publish its participation in its corporate advertising. This sponsorship did not allow Bravo to have other benefits, such as.B. free tickets to the event.

The implementation of the 2018-2008 ASU will have different impacts depending on the nature of its revenue sources. While the valuation and approach date of some contributions may not change as a result of this update, NPLs should apply the process outlined in the update to their agreements to determine proper accounting. . . .