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GAAP For Non-Profits › Specific Financial Statement Items

Capital Contributions

Accounting Entries

Where the organization has set up a restricted fund, such as a capital fund, the contribution of or for capital assets would simply be accounted for as revenue of the period in that restricted fund.

If the organization has no such restricted fund, capital contributions are recorded as deferred contributions and brought into income on the same basis as the amortization of the purchased or contributed assets. (4410.33) Therefore, where an asset is fully funded by capital contributions, the capital contribution will have no net effect on revenues over expenses on an annual basis as the amortization of the asset will equal the amortization of the contribution. The accounting for deferred capital contributions is described under Deferred Contributions, Example #2.

Where the organization does not have an appropriate restricted fund and the asset is non-depreciable (eg. land), the contribution would be recorded as a direct increase in net assets in the year of acquisition of the asset. (4410.34) No entry would be made to the statement of operations.

According to the CICA Handbook (4410.36), where a contribution is made towards activities which may include the purchase of capital assets, and no amount of the contribution is specified towards capital assets, no amount of the contribution would be applied against the amortization of capital assets. Strict adherence to this guidance may not be possible if the contributions exceed the non-capital purchases. In other words, if for example the program is fully funded, there will need to be some apportionment of contributions to the amortization of capital assets.


Where an asset is donated, the donation would be recorded at its fair value at the time of the donation, except where fair value cannot be reasonably estimated, in which case a nominal value, like $1, would be recorded.


Disclosure is required of the nature and amount of capital assets contributed in the period. (4430.35)
Information should be provided about assets contributed and given a nominal value. (4430.36)