On December 1, 2016, a college received a pledge of support for the general endowment. Which of the following is true with respect to this pledge??
A) The contribution will be recognized as revenue in 2016 if the college is a public institution.
B) The contribution will be recognized as revenue in 2016 if the college is a private institution.
C) Both A and B are true
D) Neither A nor B are true

Question

Quizplus · Accepted Answer

A private university must follow FASB standards. FASB standards require the recognition of unconditional pledges of support as revenue when the pledge is made. A public university must follow GASB standards. Pledges to be received by a public college or university in the future have an implied time restriction since funds cannot be expended until received. The restriction is an eligibility requirement and when the money is received the eligibility requirement is met.

On December 1, 2016, a College Received a Pledge of Support