Promises to Give
Accounting for Pledges
Unconditional promises to give are recognized as receivables and contribution revenue when made. Long-term promises are recorded at present value using appropriate discounting techniques.
- Record receivable immediately.
- Discount long-term pledges to present value.
- Estimate uncollectible pledges.
- Recognize contribution revenue upon promise.
Summary
Promises to give are recognized before cash is received if they are unconditional.