What is the journal entry to record a contribution of assets for a not-for-profit entity?
When a donor contributes assets (cash, equipment, car, etc.), the value of the donation is measured at fair-market-value (“FMV”).
Donations can either be restricted or unrestricted. As you can see in the example below, medical equipment was donated and the FMV was $25,000.
For a donation with no restrictions (i.e. unrestricted), the NFP entity would debit contributed asset for $25,000 and credit contribution revenue for $25,000.
For a restricted asset, the journal entry would be very similar except it would be recorded to accounts that were related to restricted use.
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You might also be interested in... How are contributed assets or contribution of time valued by an NFP?
When a donor contributes assets or services (i.e. time), the NFP entity should record the donation at fair-market-value.
What are the key financial schedules that a not-for-profit (NFP) entity must prepare
The financial statements for not-for-profit organizations are listed separately than what you are accustomed to seeing on the financial reports for for-profit entities. The required external financial statements that non-for-profit organizations will include a statement of financial position, statement of activities, and statement of cash flows:
What is included in the statement of financial position for an NFP?
The statement of financial position is essentially the balance sheet for not-for-profit organization. The visual below lists out the three main elements to the statement of financial position:
How are contributed assets or contribution of time valued by an NFP?
When a donor contributes assets or services (i.e. time), the NFP entity should record the donation at fair-market-value.
What are the key financial schedules that a not-for-profit (NFP) entity must prepare
The financial statements for not-for-profit organizations are listed separately than what you are accustomed to seeing on the financial reports for for-profit entities. The required external financial statements that non-for-profit organizations will include a statement of financial position, statement of activities, and statement of cash flows:
What is included in the statement of financial position for an NFP?
The statement of financial position is essentially the balance sheet for not-for-profit organization. The visual below lists out the three main elements to the statement of financial position:
