How does a recipient not-for-profit entity record the receipt of a gift that will be transferred without restriction to another charitable entity? What if the donor retains the right to revoke or redirect the gift?
Answer:
If the gift is transferred without restriction to another charitable entity, the recipient not-for-profit entity should record the receipt of the gift as a contribution in its financial records. The contribution should be recorded at the fair market value of the gift at the time of receipt.
If the donor retains the right to revoke or redirect the gift, the recipient not-for-profit entity should record the receipt of the gift as a liability in its financial records. The liability should be recorded at the fair market value of the gift at the time of receipt.