News•Apr 7, 2026
Reimagining Restricted Revenue: A Simpler Path to Transparency
In 2018 the Financial Accounting Standards Board collapsed the three‑column net‑asset model for nonprofits into two categories—without and with donor restrictions. The author applauds that simplification but argues it stopped short, because current GAAP still forces charities to recognize restricted contributions as revenue immediately, even when the funds are not usable. By borrowing the for‑profit “deferred revenue” treatment, nonprofits could record donor‑restricted gifts as liabilities until program conditions are met. A single revenue column and clear balance‑sheet tags would make financial health far more transparent.
