Updates to revenue recognition standards represent the biggest changes in recent history in nonprofit accounting. Nonprofit finance teams need to study and understand the updated standards so that they can apply the correct judgments about each revenue stream in their accounting and disclosures. For example, if your nonprofit organization receives a lot of government grants, it's important to note that grant payments may represent exchange transactions or contributions, depending on the details.
Both ASU 2018-08 and ASC 606 bring a need to assess how nonprofit finance teams account for revenue and apply compliant practices, especially where you have a material deferred revenue amount outstanding at year end.
With ASC Topic 606, FASB seeks to bring US GAAP standards for revenue recognition into closer alignment with international standards (IFRS), so there is greater clarity and consistency in treatment across nations, industries, and markets. ASU 2018-08 improves and clarifies the scope and existing prior guidance (from ASU 2014-09) around revenue from contributions.
With Sage Intacct, you have a partner in streamlining your compliance.
Sage Intacct Revenue Recognition for nonprofits centralizes revenue recognition inside the accounting system. You can track and account for non-exchange revenue like conditional grants and contributions, as well as exchange-based revenue streams like tuition in one central system. By combining this centralized event information with Sage Intacct's automated revenue recognition you can save time, reduce errors, and provide insights into revenue and condition status tracking.
Download this E-book to get best practices and tips on how to automate nonprofit revenue recognition for better compliance. You'll learn how automating revenue recognition with Sage Intacct ensures compliance and helps ensure successful nonprofit audits.