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FASB proposes new rules on contributions, grants

Tammy Whitehouse | August 11, 2017

Companies may soon have some new instructions to follow in deciding how to account for various types of grants and contributions.

The Financial Accounting Standards Board has proposed an accounting standard update that is intended to clarify and improve the accounting guidance on any contributions an entity might receive or make. While it’s intended mostly for not-for-profit entities, it affects all entities that make or receive contributions, like grants or donations.

The focus of the guidance is to sort out when a contribution is actually an exchange, meaning it might have conditions attached that would make it more like revenue to be reflected under the new revenue recognition standard. “This will help...

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