A not-for-profit (NFP) organization acting as a financial intermediary receives a contribution. Under the FASB Codification the NFP would be most likely to recognize the contribution as a liability under which of the following situations?

Question

Quizplus · Accepted Answer

When an NFP is acting as an agent and receiving a contribution on behalf of another organization, it should recognize the contribution as a liability since the NFP does not have control over the assets and is simply holding them for the benefit of another entity. The other options do not apply as they either refer to the NFP's ownership or control over the organization receiving the contribution, which would result in the recognition of the contribution as revenue instead of a liability.

A Not-For-Profit (NFP) Organization Acting as a Financial Intermediary Receives