Financial Statement Presentation of Conditional Funds (Federal/Governmental)

Hey y'all,

I'm looking for a second opinion on presentation of grant funds from governmental sources where the funds were received during a fiscal year, but respective costs were yet to be incurred.

Basically, the funds were frontloaded. Typically for our grants, the funds are not received until the expenses are incurred, and for these, we'll need to incur the appropriate expenses by the end of the performance period. So granted funds that are yet to be received and have no expenses to match to are typically considered conditional promises to give and are disclosed, but don't get presented in the statements.

The funds feel like deferred revenue, as grant revenue typically ties with grant expenses exactly. Revenue is earned as appropriate expenses are incurred. The only difference here is we actually have the cash. But I've never seen deferred revenue on a nonprofit balance sheet unless there's a service provided (e.g. school tuition earned over the course of a school year). Restricted feels inappropriate as there are barriers typical of federal funds.

Right now I'm planning to record as deferred revenue and confer with our auditor in regards to presentation, but I wanted to see if you folks had an idea to keep us ahead of the curve.

Any insights appreciated!

submitted by /u/Popular_Manager4215
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