A donor pledged $500,000 to a not-for-profit hospital in 2011 to conduct medical research,conditional on the hospital raising $500,000 from other donors.The other donors met the condition in 2012.The donor transferred the funds to the hospital in 2012.In which year would the revenue be recognized?

Question

Quizplus · Accepted Answer

Revenue recognition would occur in 2012 when the other donors met the condition and the $500,000 was transferred to the hospital. The donor's pledge in 2011 would not be recognized until the condition was met and the funds were received in 2012.

A Donor Pledged $500,000 to a Not-For-Profit Hospital in 2011