If a company provides a non profit organization with grant money for the purchase of a capital asset and receives the grant money 6 months in advance, shouldn't the non profit organization reflect this as a liability on the balance sheet and not as income on the P&L?
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bklynboy
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US GAAP FAS 116 requires contributions be recognized as revenue when received. The logic is that once the cash is received it is the non-profits money and not dependent on when it will be spent. This assumes that the cash contributed is not returnable.