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How to Track Grants Year-Over-Year and Produce Clear-Cut Reports

Before changes to GAAP in 2018, nonprofits in the U.S. could use deferred revenue to record restricted funds that overlapped years until the money was spent down. However, since the changes in GAAP, nonprofits must record income in the year it is received. Reporting on this has confused board members and nonprofit managers asking why their Statement of Activity (Profit & Loss) shows a large deficit or surplus. But don’t worry, there’s another way! This tutorial provides a GAAP-compliant solution to this problem.

This tutorial walks you through a solution for U.S organizations to show grant revenue from one year to the next that won’t mess up your bottom line. It will also leave your organization an easy way to read and understand accurate financial reports.

Background Image: Raincoast Conservation Foundation | Jamen Rhodes

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