Clarification: Contributions Excluded from Revenue Standard
Not-for-profits (NFP) face unique challenges in applying the new revenue recognition standard, Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), due to the variety of revenue streams common in the industry. The Financial Accounting Standards Board (FASB) recently addressed one issue, but many others remain.
The new guidance applies to all contracts with customers and contains several scope exceptions. The scope exceptions primarily apply to items covered in other standards, such as lease contracts, insurance contracts, financing arrangements, financial instruments, guarantees (other than product or service warranties) and certain nonmonetary exchanges between vendors. Contributions are not specifically scoped out of the new standard, and some stakeholders have requested FASB consider an explicit exclusion.