Under FAS 116, unconditional promises to give are recognized in the financial statements when received-not when collected.

Question

Quizplus · Accepted Answer

Under FAS 116 (Accounting for Contributions Received and Contributions Made), unconditional promises to give are recognized as revenues or gains in the financial statements when the promise is received, not when the cash is collected. This is because the standard follows the accrual basis of accounting, where revenues are recognized when earned, regardless of when the cash is received.

Under FAS 116, Unconditional Promises to Give Are Recognized in the Financial