Case Study Charitable Contributions And Debt Stud

Case Study: Charitable Contributions and DebtStudent Name:Institution affiliatedProfessor’s NameDateRequirement A: What is meant by the reference in Table 5.3-1 to an FAS 116 adjustment?Financial Accounting Standards 116 (FAS 116) is the primary guidance for recording contribution revenue by not-for-profit organizations (NFP). The standard was issued by the Financial Accounting Standards Board in 1993 sand is therefore also referred to as FASB 116. The standard requires that NFP record all unconditional contributions to revenue as soon as notification of the same is received. Therefore all unconditional promises or pledges for revenue contribution are required to be recorded in the year the notification or pledge is received. The FAS adjustment referenced in table 5.3-1 means that an adjustment is made for a pledge receivable in the donation revenue account of St. Jude Children’s Research Hospital for contribution to revenue. Contributions have been defined as unconditional, non-reciprocal transfer of assets. This means the donor attaches no condition to their promise or pledge and that they receive nothing in return. In short FAS 166 adjustment of $ 157,628 in the financial statements of St. Jude Children’s Research Hospital means that