Financial and Accounting Guide for Not-for-Profit Organizations, Eighth Edition 2014 Supplement

CHAPTER 9

Accounting Issues Relating to Fundraising

9.1 Accounting for Gifts

(a) Pledges

(b) Revenue and Restricted Gifts

(e) Pass-Through Gifts

9.1 Accounting for Gifts

(a) Pledges

p. 130, first paragraph. Replace the second sentence to read:

The pledge may be unconditional (that is, dependent only on the passage of time to become due) or conditional (that is, dependent on some specified future or uncertain event or events other than the passage of time to become binding on the donor).

p. 130, third paragraph. Remove the fourth and fifth sentences, beginning with “These judgments must be made case by case; there are no formal rules. Some of the factors . . .” and replace them with “To record a pledge there must be sufficient evidence in the form of verifiable documentation that a promise was made and received. Examples of evidence can include written agreements, pledge cards, and verifiable oral communication.”

(b) Revenue and Restricted Gifts

p. 132, first paragraph. Replace the second and third sentences to read:

Temporarily restricted net assets are defined as assets whose use is limited by a donor for a period of time or to a specific purpose and can include operating restricted funds, term endowments, annuity and life income (split-interest) funds, and unspent gifts restricted for acquisition of fixed assets. Pledges payable in a future period are considered implicitly time restricted until that period. Permanently restricted net assets include contributions and other assets ...