A foundation promises to donate $1 million to a local public broadcasting station (a not-for-profit...
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Accounting
A foundation promises to donate $1 million to a local public broadcasting station (a not-for-profit organization) in one year. When, and in what amount, should the station recognize revenue? The station applies a discount rate of 10 percent to all pledges. Would your response be the same if the foundation pledged to donate the funds only if and when the station agreed to carry a particular program? Why do many not-for-profits objects to the standards pertaining to revenue recognition of pledges?
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