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I am new to this, or any other, form so please let me know if I am following the correct protocols.
I have been sttruggling with the internet to find an answer to my question but after hours of searching I have come up with nothing helpful.
Here is the situation so far... Each year we receive a grant award from the county. The grant award amount is 65K for two years. The county pays us every quarter (8,125.00). Any money left over at the end of the two year period has to be returned. The grant is used to help people in need and is spent as needed.
My auditors have told me that I must reconize the grant as revenue when the award is granted. According to the Auditors I would have to enter the 65K as a receivable and as current revenue. Each quarter when I receive the check it would be applied against the receivable. This means for year one I would have 65k of revenue and for year two revenue would be Zero.
the Auditors are stating: the entity issuing the grant has to record the grant as an expense, 65K in year one, conversly our revenue should reflect their expense.
I can't find anything on the internet to verify the auditors theory. If anyone has any insight into this I would appricate it.
If someone could direct me to some resource materials I would appriciate it, the FASB web site doesn't offer much help.
I have been sttruggling with the internet to find an answer to my question but after hours of searching I have come up with nothing helpful.
Here is the situation so far... Each year we receive a grant award from the county. The grant award amount is 65K for two years. The county pays us every quarter (8,125.00). Any money left over at the end of the two year period has to be returned. The grant is used to help people in need and is spent as needed.
My auditors have told me that I must reconize the grant as revenue when the award is granted. According to the Auditors I would have to enter the 65K as a receivable and as current revenue. Each quarter when I receive the check it would be applied against the receivable. This means for year one I would have 65k of revenue and for year two revenue would be Zero.
the Auditors are stating: the entity issuing the grant has to record the grant as an expense, 65K in year one, conversly our revenue should reflect their expense.
I can't find anything on the internet to verify the auditors theory. If anyone has any insight into this I would appricate it.
If someone could direct me to some resource materials I would appriciate it, the FASB web site doesn't offer much help.
