Nonprofit finance, accounting, and tax news. Other tidbits of interest to the charity community.
I think it’s about time to talk about bargain purchases and review what the accounting literature has to say.
“That’ll be exciting,” I hear you say.
I know, I know. This is cool stuff.
Bottom line
The core issue is fair value: what is the fair value of the goods or services received? The second point is the contribution component is the difference between fair value and the amount paid for the goods or services.
An article in Forbes by William Barrett reports that Islamic Relief USA Says Drug Donations Fell 91%.
Since I’m an accountant, I’ll comment on a couple of the things I observed in the financial statements. If you are interested in this issue, you really should check out the full article.
This is the final post in a series that has looked at the 2011 financial statements for Blessings International as an opportunity to see where the donated GIK issues show up in an R&D NPO’s financials.
Again, the goal is not to focus attention on this particular organization, but to look at the impact of donated GIK on the financial statements.
You can download a copy of the full 990 and audited financial statements for the last 3 years from the organizations website, located here. Give them credit for making three years of reports easily available. Most NPOs only put 1 year on their website.
What would the financials look like without the GIK?
Let’s do some number crunching.
In a cover letter to the financial statements on the organization’s website, the president says: