ASNPO – Proposed changes to the accounting for contributions by not-for-profit organizations

To assess the possible impact on your organization, there are a number of sources available to learn more about the proposals. 

Resources: 

1. The AcSB has issued an overview of its Exposure Draft in an In Brief publication. Publication [ 322 kb ] [ 322 kb ]
2. The full Exposure Draft, including the proposed handbook section and amendments, is available. Exposure Draft [ 1999 kb ] [ 1999 kb ]
3. In early May, the AcSB hosted a 1-hour webinar summarizing the proposals; it can now be viewed on demand. Webinar

Your Doane Grant Thornton advisor is also available to discuss the potential impacts on your organization. 

Stakeholders can answer any or all of the questions included within the Exposure Draft by submitting a response letter by the response deadline of September 30, 2023.  

Registration information and session dates for additional consultation activities hosted by the AcSB (such as roundtables or other discussion sessions) will be posted to the Contributions – Revenue Recognition and Related Matters project page in the future. The AcSB may also host surveys during the comment period; monitor the Connect.FRAS.ca site for more information.

The specific impact of the proposals depends on each organization’s current accounting policies for recognizing revenue from contributions, but some of the larger potential impacts are summarized below. 

• The new definition for a “restricted contribution” would require the restriction to be explicitly communicated between the organization and the contributor. Restricted contributions would be deferred and only recognized as revenue when (or as) external restrictions are met. As a result, the timing of revenue recognition for some contributions may change. 
• Some organizations currently following the restricted fund method of accounting for contributions will see a significant change in their financial statements, since:
  • capital asset contributions would have to be deferred and amortized over the life of the related capital asset (or recognized directly in net assets if the related capital asset is not amortized); and 
  • endowment contributions would have to be recognized directly in net assets.  
• In many cases, pledges and bequests would not be recognized until the cash is received. 
• Organizations that use fund accounting presentation would also have to present its comparative information using fund accounting presentation (on the face of the statements, in the notes, or using schedules). 
• An organization with endowment contributions would have to disclose information about how it manages its endowments, including how it monitors their fair value and compliance with endowment agreements, as well as quantitative information about the extent to which the fair value of endowments is less than the amount the contributor requires to be maintained permanently. 
• An organization would have to disclose information about the assets it determines are available to meet the requirements of its restricted contributions, including endowments.