According to the recommendations of the Public Sector Accounting Board, when should revenue be recognized related to funds received from external parties that have imposed restrictions that limit the use of the funds?

Question

Quizplus · Accepted Answer

Revenue related to funds received from external parties that have imposed restrictions limiting the use of the funds should be recognized only when the funds are used for the purpose(s) specified. This is in line with the principle of the matching of revenue and expenses, where revenue is recognized when the related expenses are incurred. Until the funds are used for their designated purpose, they must be recorded as liabilities on the balance sheet rather than as revenue on the income statement.

According to the Recommendations of the Public Sector Accounting Board