Skip to content Menu

NACUBO has issued Accounting Advisory 19-01, FASB ASC 606, Revenue From Contracts with Customers: Tuition Revenue. The advisory uses tuition to illustrate concepts in Accounting Standards Codification (ASC) Topic 606 and asserts that a student’s signed financial responsibility agreement (or similar contract) entitles an institution to consideration, in exchange for promised services, on the payment due date. Consequently, an institution has a receivable for promised services on the date that payment is due on signed contractual agreements with students.  

The advisory explains new terms and requirements such as:

  • Performance obligations.
  • Transaction price.
  • Consideration payable to a customer (student financial aid).
  • Variable consideration.
  • Contract assets.
  • Contract liabilities.
  • Portfolio approach.
  • Receivable recognition.

The advisory also provides detailed accounting examples and addresses financial statement disclosures.

Contact

Sue Menditto

Senior Director, Accounting Policy

202.861.2542


Related Content

GASB Issues Statement on Certain Risk Disclosures

The new statement sets parameters for disclosing the risk of reduced service levels and/or the inability to meet obligations as they come due.

Meet NACUBO FARM Author Mary Wheeler

Mary Wheeler, a NACUBO consultant, former university controller, and author of the Financial Accounting and Reporting Manual (FARM) shares her thoughts on several major topics relating to higher education accounting and reporting.

FARM Has a New Look

NACUBO’s Financial Accounting and Reporting Manual (FARM) has a new look: there is more white space, journal entries and tables are easier to read, the navigation has moved from the right to left side, and links to the standard setters new website have been added.