What it is
Revenue recognition in a nonprofit starts with a reading of the agreement. Under ASU 2018-08 a condition needs both a barrier and a right of return or release, and a stipulation that fails the test is a restriction, not a condition.
The program covers completeness, the conditional versus unconditional test, restrictions and net assets, pledges and in-kind contributions.
When to use it
- Nonprofits with government, foundation or major donor grants.
- Audits where conditional agreements are new or changed.
- Organizations with long-term pledges or endowments.
What’s inside
- Gift and grant completeness and cutoff procedures
- Barrier and right of return tests from 958-605-25-5A to 25-5E
- Restriction, release and endowment procedures
- Pledge discount, allowance and in-kind gift procedures
Standard cited
This template follows ASC 958-605 / AU-C 330. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 330 explained.
Questions
Does it work for government grants?
Yes, for the contribution and exchange question. Federal awards also need the Single Audit and compliance supplement work.
Does likelihood of meeting a condition matter?
No. Whether the recipient is likely to meet the stipulation does not decide whether a barrier exists. Read 958-605-25-5A to 25-5E in the codification.
Related templates
- Audit Program: Nonprofit Organization
- Nonprofit Organization Audit Checklist (ASC 958)
- Disclosure Checklist: Not-for-Profit Entities (ASC 958)
- Nonprofit Grant and Contribution Conditions Tracker
Last updated 11/06/2026. All free templates.