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BK-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 933
Experience:  Owner of a CPA firm
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can a not for profit entity record deferred revenue in one

Customer Question

can a not for profit entity record deferred revenue in one year for a grant that is designated for a specific purpose which would not be expensed until a later year?
Submitted: 7 years ago.
Category: Tax
Expert:  BK-CPA replied 7 years ago.

The grant is restricted (non-profits have non-restricted, temporarily restricted, and permanently restricted equity classifications, generally speaking). Maybe deferred revenue could be appropriate...


Having restricted assets is generally not something a non-profit is worried about (save as maybe a fiduciary, administration, etc.)... neither is revenue.


See page 11, lines 27-29, of Form 990, located here:


I assume this answers your question.


Thank you.

Edited by BK-CPA on 6/2/2010 at 10:24 PM EST
Customer: replied 7 years ago.

I was charged for this answer and I did not accept the answer. The answer -- "Maybe deferred revenue could be appropriate..." was the answer given and I'm not sure what was meant by that answer.


Karen Vollmar

Expert:  BK-CPA replied 7 years ago.

Deferred revenue is appropriate for deferred revenue, not a restricted grant... (deferred revenue is a more traditional method...)


There is generally a 'black and white' answer for any question involving the tax law for a specific situation. Sometimes, the law is not specific.


I am someone like you (a user of the system). I have no idea if you were charged, but no expert gets paid without the person asking the question 'accepting' the answer, so I am happy to answer the question to your satisfaction.


Realize, that if I had specific knowledge of your facts and circumstances, as though you were sitting and talking to me in person etc., that I could direct the conversation and get to the answer you are looking for... If you are asking the questions and directing the conversation, then I'm generally restricted to answering your questions. Long story short, get specific if you want me to try and be specific back. I am a certified public accountant having prepared many a non-profit financial and 990, so feel free, but don't waste it. Take your $15 answer for what it is and help me help you. Make sense?


Let me know.


Thank you.



PS - If I rephrase a tad, the first answer will make more sense perhaps.


"...deferred revenue (a liability, not equity, whether non-restricted or otherwise as such terminology applies to equity, or net assets, in the case of a non-profit, as a liability is similar in nature to a loan, while restricted net assets have been set aside)...

Edited by BK-CPA on 6/6/2010 at 12:38 AM EST

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