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Contribution Agreement Accounting

NGOs funded by the Department of Justice of Canada must have a comprehensive and reliable accounting system to track all transactions related to the contribution agreement. The accounting system should be computerized and compliant with the standards used in Canada: a dual registration system with balance sheet and loss accounts. Some frequently used accounting packages are ACCPAC, Oracle and Simply Accounting. The Department reserves the right to apply to the Organization any sum owed by Her Majesty`s Organization. This section does not limit the right of delay granted by the Act, a provision of the Agreement or other agreements between Her Majesty and the Organization. This promise corresponds to the definition of a contribution, as it is an unconditional transfer of money, both voluntary and non-reciprocal. By definition, every social benefit alpha receives is not considered equivalent. Recipients need to understand the terms of each of their contribution agreements, as none of the above indicators definitively distinguish a contribution from an exchange. For example, the sale of goods or services at prices well below the market price may be considered a partial contribution. These contributions are measured on the basis of the difference between the fair value of the products provided or the services provided and the consideration received.

ASU 2018-08 changes the argument process behind the classification of transactions whose nuances may affect the timing of revenue recognition. Contributions and exchanges are subject to different accounting statements and can therefore be recorded during different billing periods and require different information. The implementation of ASU 2018-08 will have a different impact on different NPNs depending on the nature of its revenue streams. While the measurement and registration date of certain contributions may not vary as a result of this update, NRPs must apply the process described in the update to their agreements to determine the proper accounting. Recipients are encouraged to contact their external accounting firm or program manager to discuss project accounting systems to ensure they are best able to meet the requirements of the certification bodies. Suppliers and recipients are required to use the same criteria to determine whether transfers are contributions or exchanges and whether contributions are conditional or unconditional. Although the symmetry is expected between suppliers and beneficiaries, ASU 2018-08 does not require both parties to record contributions that were provided and received during the same period and in the same amounts.

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