Final answer:
The FASB would classify 'Provision for Uncollectible Pledges' as a contra asset, reducing the value of gross pledges receivable by the estimated uncollectible amount for a not-for-profit arts organization.
Step-by-step explanation:
According to the Financial Accounting Standards Board (FASB), a not-for-profit arts organization would report the account Provision for Uncollectible Pledges as a contra asset. This account is utilized to reduce the total value of the gross pledges receivable on the balance sheet, reflecting the amount that the organization estimates will not be collected. It is not an expense because it's a valuation account that is directly related to an asset account; nor is it a liability or a component of net assets.