A nonprofit entity conducts a special fundraising campaign at the end of fiscal year 2018, and specifies that it will use the money for its 2019 general operations. It receives pledges totaling $200,000. Based on past experience, the entity expects to receive $150,000 in cash. How should the entity report these events?

Question

Quizplus · Accepted Answer

In this case, the special fundraising event establishes the time restriction. However, the accounting treatment of conditions differs from that regarding restrictions. A time restriction is not a condition because the only thing that must happen is the passage of time. A time restriction causes the contribution to be classified as support with donor restrictions. The nonprofit reclassifies these net assets when the time restriction expires at the beginning of 2019.

A Nonprofit Entity Conducts a Special Fundraising Campaign at the End