The implementation of FASB’s ASU 2020-05 (Topic 606) and IFRS 15 changes the way in which membership associations are required to report membership dues revenue.  Under the new standard, the member benefits specified in the membership agreement embody goods and/or services that the nonprofit has promised to transfer to members. These promises are deemed “performance obligations”, and the transaction price for each good/service must be accounted for when recording membership dues.

Read more on how to account for membership dues under these new standards, see an accounting example, and understand best practices in documentation.