Lithuania clarifies when non-profits book receipts as sales or financing

Non-profit entities outside the public sector — associations, foundations, charities and public establishmentsLAR — distinguish amounts received by their basis and economic substance. Where an amount pays for specifically provided services at a set price to specific recipients, it is sales revenue.LAR Where an amount funds a programme, project or activity and its use is linked to compensation of costs incurred, it is a financing amount.LAR

The decisive test is the actual purpose of the payment, irrespective of what is written in a payment order.LAR Sales revenue presupposes a price for a specific service or service basket, even without a service-payment contract naming a price in every case file.LAR Financing presupposes no service price, no contract fixing service provision and payment, and no specific service recipient; the money is allocated to an activity or to a share of its expenses.LAR

Sales revenue is recognised when the service is providedLAR, and the full value of the service is the entity's sales revenue. It does not matter who pays: the recipient, the recipient's parents, a municipality, a school, kindergarten or education centre, in full or in part.LAR Typical cases are a per-child education basket, social services to a specific person under a tripartite contract, periodically paid fees for clubs and classes, employment programmes for socially supported children, summer camps and other individually provided services with a pre-set price.

Financing amounts cover project financing, programme execution financing, activity estimate financing, targeted funds for an organisation's activity and reimbursement of expenses against costs incurred. The payer is typically a budget, a fund or another funder rather than the service recipient. Recognition follows the financing conditions and the applicable accounting rules: once the costs of the financed activity are registered, the use of the financing and financing income are registered alongside themLAR.

A membership fee illustrates the boundary. Where a sports organisation's members pay a membership fee that entitles them to take part in its training sessions, that fee is sales revenue.LAR Where the same kind of organisation runs sessions open to any registered member of the public under a defined project financed from a municipal budget, the amounts received are targeted financingLAR; when the coaching fees are charged as costs, the entity registers use of the targeted financing and financing incomeLAR.

Correct classification matters because it determines whether financial statements present a true and fair view of income, costs and unused financing.

Legal basis: Pelno nesiekiančių juridinių asmenų buhalterinės apskaitos ir finansinių ataskaitų sudarymo ir pateikimo taisyklės, approved by Lietuvos Respublikos finansų ministro 2004 m. lapkričio 22 d. įsakymas Nr. 1K-372, as applied by the Ministry's October 2026 Išaiškinimas dėl gaunamų sumų apskaitos pelno nesiekiančiuose subjektuose (PNS)LAR.