Case Study 7

Contributed Services, Facilities, and Gifts In-Kind

Learning objective

  • Identify accounting treatment for contributed services, gifts in-kind, and contributed facilities.


Although many donors provide cash gifts, contributions are not limited to cash. Many people volunteer their time on behalf of their favorite not-for-profits (NFPs). FASB differentiates between volunteer work that qualifies as a contributed service and those that do not. To recognize contributions of services, the donor must either create or enhance a nonfinancial asset or provide a service that requires specialized skills. For example, a CPA’s act of volunteering to prepare the 990 for an NFP would be a contributed service that requires specialized skills. However, a CPA’s act of volunteering to staff the phone bank for the annual fund drive would not require specialized skills. An NFP receives many hours of volunteer work that are not recognized in the financial statements.

When a contributed service meets the requirements, the NFP would recognize contribution revenue and either an asset or expense. Whether such contributions should be recognized is unaffected by whether the NFP could afford to purchase the services at their fair value.

Many NFPs still want to recognize the work of volunteers in their financial statements. Although they can’t recognize the value in the financial statements, they can indicate the hours of benefits received in the notes and indicate they were not ...

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