[shawnl112]

In Not-for-Profit Transfers of Assets and Other Accounting Issues

Under Beneficiary Accounting, there are 3 different scenarios to account for asset transfers

DR: Receivable
CR: Contribution

DR: Beneficial Interest
CR: Contribution

DR: Interest in recipient net assets
CR: Change in interest in recipient net assets

When do we use each one? I understand we would use the last one when there’s a financial interrelation but what about the first two?

[mskcle]

1) When there is no financial interrelationships or beneficial interests

2) When they are not financially interrelated but have beneficial interest

3) When they are financially interrelated

(In order of the JE's you entered)

[shawnl112]

Thanks!

Financially interrelationship occurs when:

1. Organization has the ability to influence the operating and financial decisions of the other
2. One organization has an ongoing economic interest in the net assets of the other

But when does BENEFICIAL INTEREST occur?

[mskcle]

My understanding of it is that when the beneficiary (chosen by the resource provider) has an unconditional right to receive specified cash flows from a pool of assets as contribution revenue (the credit at Fair Value). The beneficiary's rights to their assets can only be recognized if the recipient does not have explicitly granted variance power.

[Author]

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