I have this question in the back of my book (Gleim). It is a couple years old (lots of wear and tear), and the SIM answer pages are shot, so I cannot see the answer. I can find stuff in the code when I use the online study guide, but I don't know what one is correct?!?!?!?!
Here is the question.
Johnson Inc. donated $100,000 to Not-for-profit A. NFP-A has decided to invest the $100,000 and give the interest to NFP-B. The two are interrelated, and NFP-A is not acting as an agent. How should NFP-A recognize the $100,000?
I have found these two on my online study unit codification. Which one would be the correct answer????
#1) 958-20-25-1 Recognition
General
> Contributions Received for a Financially Interrelated Beneficiary
Pursuant to paragraph 958-605-25-27, if a recipient entity and a specified beneficiary are financially interrelated entities and the recipient entity is not a trustee, the recipient entity shall recognize a contribution received when it receives assets (financial or nonfinancial) from the donor that are specified for the beneficiary. For example, a foundation that exists to raise, hold, and invest assets for the specified beneficiary or for a group of affiliates of which the specified beneficiary is a member generally is financially interrelated with the not-for-profit entity or entities (NFPs) it supports and recognizes contribution revenue when it receives assets from the donor. See Examples 1 through 3 (paragraphs 958-20-55-3 through 55-17) for illustrations of this guidance.
#2) >> Financially Interrelated Entitles
958-605-25-27
If a recipient entity and a specified beneficiary are financially interrelated entities and the recipient entity is not a trustee, the recipient entity shall recognize a contribution received when it receives assets (financial or nonfinancial) from the donor that are specified for the beneficiary.
I am leaning towards the second one because the first one refers to it and uses “pursuant to”.
AUD - 87
FAR - 72
REG - N/A
BEC - N/A
.