Example Multiyear Pledge Journal Entries: A donor makes a multiyear pledge to a NFP, promising to give the NFP $1,000 each year, beginning one year from today's date. Assuming the NFP uses a normal discounting factor of 696, the present value of the future cash flows is $4,212 ($1,000 * 4.212) where n = 5, and i = 6%. Pledges Receivable-DR 5,000 Contributions-DR Discount on Pledges Rec-DR 4,212 788 Equity Impact: NA-DR increased $4,212 One year later, the first payment is received by the NFP. Cash- DR 1,000 Pledges Receivable -DR 1,000 If the pledge money is WODR as to purpose, the $1,000 would be reclassified to WODR. If the pledge money is restricted for some purpose, the $1,000 would be reclassified to WODR when the money is to be spent on the specific purpose. At this point, it is necessary to revalue the pledge to the value of the expected future cash flows at this point. The present value of the future four cash flows is $3,465 ($1,000 * 3.465 where n-4 and 1-6%). The carrying value of the Pledge Receivable should be $3,465 but currently has a carrying value of $3,212 ($4,212-1,000). Consequently, Discount on Pledges Receivable needs to be increased $253 ($3465-3212). The adjustment is made through the Contribution revenue account Discount on Pledges Receivable-DR 253 Contributions-DR 253 Equity Impact: NA-DR increased $253 milar entries would occur throughout the life of the pledge. Question: How much Contribution Revenue related to this pledge will be recognized over the entire life of the pledge