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Not-for-profit GAAP: Grants awarded / receivable?

I have a not-for-profit client for whom my team and I provide outsourced CFO & accounting services. We're getting them ready for the annual audit. At least one grant was awarded before year-end, but funds were not received by year-end and services were not provided to fulfill this grant before year-end. It was just the award notification that was sent out. Does GAAP require that I treat this as a pledge receivable and calculate the NPV of the grant? Or is this different somehow - and if so, why? Looking forward to your responses.


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

This may help:

"What is an unconditional promise to give (pledge)?
FASB116 stipulates that “unconditional promises to give” are to be recorded at the time the NFP receives notification of the promise. This notification must be in written form, oral promises should not be recorded. FASB defines a condition as a “future and uncertain event” that must occur for the promise to give to become binding.

In many cases, the only notification an NFP receives is when they receive the contribution. In this case it is clear that the entire contribution must be recorded at that time.

However, in other cases the NFP will receive notification of a contribution prior to the actual receipt of the funds. In this case the NFP must determine if they have received an “unconditional promise to give”, if so the revenue must be recorded.

Some factors that indicate an unconditional promise to give has been received are:

The donor has made payments under the promise

The promise contains a fixed payment schedule

The award uses words such as – promise, binding, agree…

The amount of the promise is determinable

The donor has the financial ability to fulfill the promise

A condition that is not truly uncertain – such as the NFP continuing operations

Examples of true conditions are:

Raising matching funds or receipt of other awards

Receipt of funds is based on a certain outcome

Amount of award is based on the amount expended"

Also see Paragraph 92 of the FAS:


Proformative courses by Wayne Spivak:

Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

The issue here is if the grant is CURRENT Pledge Receivable and does not have to be NPV'd. Most pledge receivables I have seen are multi year, hence the need for NPV.


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