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Not-For-Profit Alert: In-Kind Contributions

By Jamie Lontz, John Eusanio .

In September 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-07, Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets, which provided additional guidance on how not-for-profit organizations should record and disclose in-kind contributions received. The update was issued to increase the transparency of contributed nonfinancial assets for not-for-profit entities through enhanced presentation and disclosure.


In-kind contributions, or contributed non-financial assets, can be items such as fixed assets (land, buildings, and equipment), food or clothing donations, materials and supplies, or contributed services. Terms typically used by not-for-profit organization to present contributed nonfinancial assets are gifts, donations, grants, gifts-in-kind, donated services, or other terms. In-kind contributions can be an important source of revenue for not-for-profits, especially during times of economic recession, as these donated items may be central to your organization's mission or can assist in alleviating certain programmatic and mission driven activity expenses.  


ASU 2020-07 requires not-for-profits to present in-kind contributions as a separate line item in the Statement of Activities, separate from contributions of cash and other financial assets. In addition, additional disclosures will be required including the following:  

  • In-kind contributions disaggregated by category that depicts the type of nonfinancial asset
  • For each category of contributed asset presented, qualitative information about whether the contributed non-financial assets were monetized or utilized during the reporting period
  • If the assets were utilized, a description of the programs or other activities in which those assets were used must also be disclosed
  • The not-for-profit’s policy about monetizing rather than utilizing in-kind contributions
  • A description of the valuation techniques and inputs that the organization utilized to determine the fair value of the in-kind contribution is required to be disclosed, in accordance with the disclosure requirements in FASB ASC 820, Fair Value Measurement, at initial recognition
  • The principal market used to arrive at fair value if it is a market in which the recipient organization is prohibited by donor imposed restrictions from selling or using the in-kind contributions 

Transition and application

ASU 2020-07 should be applied retrospectively, and will be effective for annual periods beginning after June 30, 2021, and for interim periods within annual periods beginning after June 15, 2022. Early adoption is also permitted.

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