Make-A-Wish Foundation reports contributions receivable on its balance sheet, expected to be collected in three years. How is this receivable measured?

Question

Quizplus · Accepted Answer

Contributions receivable, especially those expected to be collected in future years like in this case, are measured at the present value of the future contributions, adjusted for expected uncollectibles. This accounts for the time value of money and the risk of some contributions not being collected.

Make-A-Wish Foundation Reports Contributions Receivable on Its Balance Sheet, Expected