Revenues and expenses can only be recorded if certain conditions are met, and exchange transactions follow a five-step process. First, the organization must identify the contract with the customer. Second, the organization identifies the performance obligation of the contract (i.e., the goods or services to be transferred). Third, the organization determines the transaction price. Fourth, the organization allocates this price to the performance obligations. Fifth, the revenue is recognized as the performance obligation is met. The five-step process only applies to exchanges. In the case of Not for Profit Organizations the recognition of specific gifts or support is allowed even though the gift has not been received, and even though no goods or services have actually been provided provided. In fact, pledges are enforceable contracts. We record pledges as support if there is a specific amount and a reasonable likelihood of collection.