Contributions to be paid in future periods should be recorded at present value.

Question

Quizplus · Accepted Answer

FASB requires multiyear pledges to be recorded at the present value of the future collections. As time passes, the present value of the pledge receivable will increase. At the end of each accounting period the difference between the previously recorded revenue and the new present value is recorded as additional contribution revenue, not interest.

Contributions to Be Paid in Future Periods Should Be Recorded