In the past we have written off uncollectible pledges to Bad Debt Expense. This year our corporate office is asking us to write off the expense as a contra to Revenue. Is there a guideline to follow regarding this type of transaction? Does it have a FASB rule?

The bottom line does not change in either scenario.

Thanks,

Sam Clawson

AICPA Audit and Accounting Guide -- Not for Profit Organizations
Paragraph 5.71

"Such decreases should be reported as expenses or losses (bad debt) in the net asset class in which the net assets are represented"

Therefore it should be shown as a bad debt and not netted against revenue.