A not-for-profit organization receives a pledge from a donor in fiscal 2013.The terms of the pledge are such that the organization will receive a large contribution in fiscal 2015.At what value should the pledge be reported in the organization's 2013 statement of financial position?

Question

Quizplus · Accepted Answer

The pledge should be reported at present value in the organization's financial statements. This is because the pledge is not received until future fiscal year(s), and the organization needs to reflect the time value of money in its reporting. Present value will reflect the current value of the pledge, considering the time value of money.

A Not-For-Profit Organization Receives a Pledge from a Donor in Fiscal