November 2023
13:00 - 14:00

ED2 - Grant expenses

The free online event held in English with resources in French and Spanish.

This webinar covered the proposals in relation to Grant expenses that are set out in the International Non-Profit Accounting Guidance Exposure Draft 2 (INPAG ED2).

The webinar took the following questions and comments from participants:

Q1: These proposals seems very complicated. Lots of new terms and quite a lot to get your head around. If this is aimed at small / medium sized NPOs, why make it so complicated?

Q2: If there are long term grant agreements, that cover a number of years, is it necessary to do net present value calculations, considering the time value of money?

Q3: The word obligations is used a lot. Present obligations (that give rise to a liability), obligations within an Enforceable Grant Agreement (an EGO), and an obligation to transfer funds as part of an Other Funding Agreement. Is it necessary to use the same word in so many different ways?

Q4: Is it possible for a grant expense by a grant maker to be recognised in their books before the funds have been transferred?

Q5: Many grant agreements are vague, or imprecise in their definition of obligations on either party, or attributing amounts to each output. Would there be value in some standard clauses for grant agreements, to get better clarity?

Q6: How do the rules about principal / agent apply in consortia or joint ventures? If a consortium lead is not a principal, does that mean the transactions relating to the other members do not go through the lead’s books?

Q7: What is the relationship between the EGA/OFA distinction in ED2 and fund accounting in ED1? Would all revenue from EGAs be considered restricted?

Q8: It seems that for a grant maker to recognise expenses in their own books (relating to an EGA), they have to get information about progress / achievement from the grantor. Is this practical? It creates real costs on both sides.

Watch the video below

Download the slide deck here

Recommended videos

Explainer videos for Grant expenses in English, Spanish and French


INPAG ED2 Overview

To share your voice on this or other topics in Exposure Draft 2, please visit www.ifr4npo.org/have-your-say