A nongovernment, not-for-profit organization received $5,000,000 of unconditional pledges during 2013 that had not been collected by year end. In its 2013 statement of activities, the organization should recognize

Question

Quizplus · Accepted Answer

The organization should recognize temporarily restricted revenues of $5,000,000 in its statement of activities because the pledges are unconditional and therefore considered contributions. However, they have not yet been collected and therefore cannot be classified as unrestricted revenues. The classification as temporarily restricted reflects that the organization has not yet met the conditions necessary to fully realize the revenue.

A Nongovernment, Not-For-Profit Organization Received $5,000,000 of Unconditional Pledges During