Under FAS 116, the definition of contributions includes both reciprocal and nonreciprocal transfers.

Question

Quizplus · Accepted Answer

Under FAS 116 (now known as ASC 958-605), contributions are defined as nonreciprocal transfers, meaning the donor does not expect to receive anything of approximately equal value in return. Reciprocal transfers, where both parties receive and sacrifice approximately equal value, are considered exchanges and are not classified as contributions under this standard.

Under FAS 116, the Definition of Contributions Includes Both Reciprocal