oa Meditari : Research Journal of the School of Accounting Sciences - Recognition of restricted receipts by not-for-profit organisations : problems, standards and empirical results
|Article Title||Recognition of restricted receipts by not-for-profit organisations : problems, standards and empirical results|
|© Publisher:||University of Pretoria|
|Journal||Meditari : Research Journal of the School of Accounting Sciences|
|Publication Date||Jan 2007|
|Pages||71 - 89|
|Keyword(s)||Accounting standards, Capital grants, Donations, Funds, Grants received in advance, Income, Not-for-profit organisations, Recognition, Restricted receipts and Specific purpose|
Not-for-profit organisations often have accounting problems in the recognition of donations where donors impose restrictions on how funds are spent. The specific receipts which cause most problems relate to grants made 'in advance', grants received for a specific purpose, and capital grants. This article investigates whether some of these restricted receipts must be recorded as income in the income statement; whether others must be recorded directly against a fund, or whether unused funds must be recorded as a liability. This article discusses these problems and the principles of accounting standards already issued specifically for not-for-profit organisations in some countries. This article also presents the results of an empirical study done in South Africa which has a bearing on the recognition of certain restricted receipts. Recommendations are made on the most appropriate way for not-for-profit organisations to record receipts in advance, receipts for specific purposes and capital grants in their accounting systems.
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