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Many NFPs provide goods or services in the ordinary course of carrying out their mission. In some cases, those goods or services might be purchased by customers in exchange transactions. In other circumstances they might be funded by a government or foundation for the benefit of the public at large.
This chapter discusses how to determine whether transactions are exchange or nonexchange under a framework established by ASU 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. Exchange transactions are subject to the guidance on revenue from contracts with customers in ASC 606, Revenue from Contracts with Customers, which is summarized in this chapter and covered in detail in the PwC Revenue from contracts with customers guide. The nonexchange revenue recognition model—ASC 958-605, Revenue Recognition - Contributions—is described in NP 6. This chapter also discusses accounting for transactions that are partially exchange and partially contributions.

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