Glossary / Revenue Recognition
What is Revenue Recognition?
The accounting principle governing when revenue is recorded.
Simple definition
The accounting principle governing when revenue is recorded. For nonprofits, contributions are recognized when received (or pledged, if unconditional). Exchange transactions follow different rules than contributions.
Why it matters for your nonprofit
Nonprofits recognize contributions when the donor promise is unconditional, not when the cash hits the bank. Getting this wrong moves revenue between years.
How it shows up in daily work
Split exchange vs contribution, record pledges when they are unconditional, and defer conditional grants until barriers are met.
Common mistakes
- Booking a multi-year pledge as cash in year one.
- Recognizing a restricted grant as unrestricted because the checking account is mixed.
- Treating registration fees as contributions.
How AlignMint helps
AlignMint ties fund accounting, donor records, and reporting in one place so terms like Revenue Recognition show up correctly in your books—not only in a policy memo.
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