[Anonymous]

The Dunstown County general fund received a notice of a federal grant award for an expenditure-driven (reimbursement) grant in the amount of $1,000,000. Included with the notice was an advance of $250,000. During the year, the County incurred $400,000 of qualifying eligible grant expenditures, and no additional money had been received from the grantor.

What would be the amount of revenues reported at the entity-wide level?

A. $250,000

B. $400,000

C. $650,000

D. $1,000,000

B. Regardless of whether you are reporting the revenue at the fund or entity-wide level, the basic recognition criterion is the same: when all eligibility requirements are met. The availability requirement does not apply with entity-wide statements, but availability does not make a difference in this case.

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Why is 400,000 reported as revenue? The 1,000,000 is only a notice, and the actual amount given is only 250,000, thus the entity only has 250,000 to report as revenue, right?

[Anonymous]

@Determined: The question states that this grant is an “expenditure-driven (reimbursement) grant “. This means they are only entitled to grant revenue for the amount of costs incurred. So the $1,000,000 is a conditional grant, which is not recognized as revenue, as the conditions that need to be met in order to have access to the revenue have not been satisfied.

Because $400,000 of qualifying grant expenses have been incurred, this is the amount of the $1,000,000 that the government is entitled to in this year as revenue. The answer explanation also articulates this: that the eligibility requirements for the revenue have been satisfied.

[Anonymous]

Oh, gotcha. Thanks.

[Anonymous]

For government, if the grant is restricted, you earn it when you spend it!

Just like Tim's wife and daughter (this how I remember it)-Becker.

[Author]

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