A condition is effectively a barrier that must be overcome before a promised gift becomes a contribution. A part of the definition of a contribution is that it is an unconditional promise to transfer assets to a nonprofit.
I received a question about conditional contributions that went along the lines of “is a contribution conditional if the promised contribution is not paid until the end of the year and the work is completed?” What you could have here is an exchange transaction, and not technically a contribution.
But assuming it is a contribution you can recognize the revenue in two ways depending on the donor/grantor’s instructions. The first would be piecemeal. As you do a portion of the work a portion of the condition of the contribution is met and therefore you can count it as revenue and a receivable. So as you do the work, you recognize a bit of the grant at a time. The second would be to recognize it all at once after the work is done. Once the work is done (the condition is met) then you have a contribution and book the receivable (assuming you do not have the funds yet).
When you get the actual cash does not factor into the discussion in any case, just when you get conformation from the donor that at some point you will be getting the cash.
