When should revenue be recognized in relation to contributions to endowments?

Revenue from contributions to endowments is recognized when contributions are received because this aligns with the principles of accrual accounting, which emphasizes recognizing revenue when it is earned. In the case of endowments, the act of receiving the contribution signifies that the organization has control over the resources and can use them as intended based on the terms established.

This immediate recognition upon receipt acknowledges the donor's intent and commitment, ensuring that the financial situation of the organization reflects the contribution's impact at that moment. It's crucial to record this income promptly to present an accurate financial picture, which is especially important for non-profit organizations relying on donations.

Other options may suggest different timings or dependencies related to legal claims, disbursement conditions, or post-conditions related to the endowment. However, these conditions do not apply to the straightforward act of recognizing revenue received from contributions.