Article Archives >> Behind the Numbers >> July 16-31, 2009
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When Is a Contribution Not a Contribution?
By Eric Fraint, President
Your Part-Time Controller, LLC
Congratulations! Your organization just received a major contribution. But wait, your accountant or auditor says it is not a contribution; it is an exchange transaction. What does this mean to you and why should you care? This article will explain the difference between a contribution and an exchange transaction, why this difference is important, and how to distinguish a contribution from an exchange transaction.
So, what is an exchange transaction? The key accounting rule governing this topic is Statement of Financial Accounting Standards No. 116 issued by the Financial Accounting Standards Board: “Accounting for Contributions Received and Contributions Made. Exchange transactions are defined as:....
Article Archives >> Behind the Numbers >> July 16-31, 2009
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