Two nonprofit accounting questions - non-cash donations and fixed assets

Discussion in 'Accounting' started by Bill, Sep 4, 2003.

  1. Bill

    Bill Guest

    I am updating the accounting records of a 4 year old church.
    Regarding non-cash donations, the giver's account is credited, but
    should the debit be to the nature of the gift? Example, paper or
    pens, to office supplies? Or, cost of a cell phone, to phone expense?
    These items are in a temporary asset account right now.

    On fixed assets, I'm capitalizing items like chairs and tables, etc.
    I want to have a $ 500 minimum on these items, except when we buy so
    many. But an item like musical bells for just under $500, I hesitate
    to capitalize these, but I also don't want to have a policy then have
    a number of exceptions to it. Television under $500 or DVD players,
    VCR's, expense. Anyone have a good benchmark I'm missing here?

    Thanks for your help!!
     
    Bill, Sep 4, 2003
    #1
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  2. Bill

    Chris Luper Guest

    >I am updating the accounting records of a 4 year old church.
    >Regarding non-cash donations, the giver's account is credited, but
    >should the debit be to the nature of the gift? Example, paper or
    >pens, to office supplies? Or, cost of a cell phone, to phone expense?
    > These items are in a temporary asset account right now.


    paper and pens: office expense.

    cost of cell phone: should be a prepaid until phone time is used, at which
    point it is phone expense.

    >On fixed assets, I'm capitalizing items like chairs and tables, etc.
    >I want to have a $ 500 minimum on these items, except when we buy so
    >many. But an item like musical bells for just under $500, I hesitate
    >to capitalize these, but I also don't want to have a policy then have
    >a number of exceptions to it. Television under $500 or DVD players,
    >VCR's, expense. Anyone have a good benchmark I'm missing here?
    >


    It really depends on the size of the non-profit what your materiality
    considerations should be, but I would have a hard time expensing the purchase
    of a television.
     
    Chris Luper, Sep 4, 2003
    #2
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  3. Bill

    Janice Davis Guest

    "Chris Luper" <> wrote in message
    news:...
    > >I am updating the accounting records of a 4 year old church.
    > >Regarding non-cash donations, the giver's account is credited, but
    > >should the debit be to the nature of the gift? Example, paper or
    > >pens, to office supplies? Or, cost of a cell phone, to phone expense?
    > > These items are in a temporary asset account right now.

    >
    > paper and pens: office expense.


    How is this an expense if these items are donated?

    > cost of cell phone: should be a prepaid until phone time is used, at

    which
    > point it is phone expense.


    Again I think this cell phone is a donated item. At least that is the way
    Bill stated it.
     
    Janice Davis, Sep 4, 2003
    #3
  4. Bill

    Bill Guest

    "Janice Davis" <> wrote in message news:<mZL5b.20877$j26.20764@lakeread02>...
    > "Chris Luper" <> wrote in message
    > news:...
    > > >I am updating the accounting records of a 4 year old church.
    > > >Regarding non-cash donations, the giver's account is credited, but
    > > >should the debit be to the nature of the gift? Example, paper or
    > > >pens, to office supplies? Or, cost of a cell phone, to phone expense?
    > > > These items are in a temporary asset account right now.

    > >
    > > paper and pens: office expense.

    >
    > How is this an expense if these items are donated?
    >
    > > cost of cell phone: should be a prepaid until phone time is used, at

    > which
    > > point it is phone expense.

    >
    > Again I think this cell phone is a donated item. At least that is the way
    > Bill stated it.


    In my way of thinking, the expense offsets the credit to the giver's
    record (and is income to the church.)
    At year end, I'll reclass these items to the appropriate expense or
    asset accounts.

    I'll capitalize the tv's for three years, I agree.
     
    Bill, Sep 4, 2003
    #4
  5. Bill

    Bill Lentz Guest

    On Thu, 4 Sep 2003 14:00:36 -0500, "Janice Davis" <>
    wrote:

    >
    >"Chris Luper" <> wrote in message
    >news:...
    >> >I am updating the accounting records of a 4 year old church.
    >> >Regarding non-cash donations, the giver's account is credited, but
    >> >should the debit be to the nature of the gift? Example, paper or
    >> >pens, to office supplies? Or, cost of a cell phone, to phone expense?
    >> > These items are in a temporary asset account right now.

    >>
    >> paper and pens: office expense.

    >
    >How is this an expense if these items are donated?
    >


    Not for profits frequently record donated goods and services as an "In
    and Out" transaction
     
    Bill Lentz, Sep 4, 2003
    #5
  6. Bill

    Ab Guest

    The entry is a debit to an expense or asset and a credit to revenue.
    Donated revenue and expense are reported in two lines and they show
    the sam balance.

    Hope this helps
    Ab


    "Janice Davis" <> wrote in message news:<mZL5b.20877$j26.20764@lakeread02>...
    > "Chris Luper" <> wrote in message
    > news:...
    > > >I am updating the accounting records of a 4 year old church.
    > > >Regarding non-cash donations, the giver's account is credited, but
    > > >should the debit be to the nature of the gift? Example, paper or
    > > >pens, to office supplies? Or, cost of a cell phone, to phone expense?
    > > > These items are in a temporary asset account right now.

    > >
    > > paper and pens: office expense.

    >
    > How is this an expense if these items are donated?
    >
    > > cost of cell phone: should be a prepaid until phone time is used, at

    > which
    > > point it is phone expense.

    >
    > Again I think this cell phone is a donated item. At least that is the way
    > Bill stated it.
     
    Ab, Sep 4, 2003
    #6
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