A private sector,not-for-profit hospital received a pledge of $150,000 in 2011 to be used for a building to be constructed in 2012 but contingent on the hospital being able to raise an equivalent amount from other donors.As of the end of 2011,half the amount had been raised from other donors.In 2012,the hospital raised the amount from other donors.The donor gave the $150,000 to the hospital in 2012 and the building was completed in 2012.In which year should the hospital recognize the $150,000 from the pledge?

Question

Quizplus · Accepted Answer

The hospital should recognize the $150,000 from the pledge in the year it was received, which is 2012. Since the pledge was contingent on the hospital raising an equivalent amount from other donors, only half of the pledge ($75,000) could be recognized as revenue in 2011. Once the hospital was able to raise the remaining amount in 2012 and received the full $150,000 pledge, it could recognize the full amount as revenue in that year.

A Private Sector,not-For-Profit Hospital Received a Pledge of $150,000 in 2011