On December 1, 2016, a college received a pledge to support a program in the following two years. Which of the following is true with respect to this pledge?
A) If the college is a private institution, the contribution revenue will be recognized within the temporarily restricted category provided the pledge is unconditional.
B) If the college is a public institution, no contribution revenue will recognized in 2016 since the time restriction is deemed to be an unsatisfied eligibility requirement.
C) Both A and B are true
D) Neither A nor B are true

Question

Quizplus · Accepted Answer

A private university must follow FASB standards. FASB standards require the recognition of unconditional pledges of support as revenue when the pledge is made. A public university must follow GASB standards. Pledges to be received by a public college or university in the future have an implied time restriction since funds cannot be expended until received. The restriction is an eligibility requirement and when the money is received the eligibility requirement is met.

On December 1, 2016, a College Received a Pledge to Support