Revenue Recognition: Cash Received Determines Available Funds

Revenue Recognition: Cash Received Determines Available Funds

For projects, revenue is recognized only when cash is received.

• Donations, grants, and other income do not increase your project fund balance until the cash has actually been received by Social Good Fund.

• Pledges, promises to give, and other receivables are not recognized as revenue in your project fund and do not increase the funds available for spending.

• This policy ensures that projects do not spend against anticipated or uncertain income.

Year-End Exception: Deposits in Transit

The only exception to our cash-based revenue recognition policy occurs at fiscal year-end:

• For checks to be accrued back to the prior year, the date on the check must correspond to the prior year. An example would be a check deposit made after 12/31 that had a check date 12/31 or prior.

• These amounts are accrued back to 12/31 and included in the prior year’s project fund balance.

• Revenue accrued back to 12/31 will also include an associated sponsorship admin cost entry dated 12/31.

• In addition to checks, you may also see a small amount of credit card donation transactions accrued back to the prior year when transactions were processed by the card processor after year-end but relate to prior-year activity.

• This exception applies only when funds have cleared or substantially settled shortly after year-end and meet year-end accrual criteria.