本文发表在 rolia.net 枫下论坛I would like to have a detailed discussion:
1. I agreed with the BDO's conclusion to expense the supplies but disagree the reason you posted here (suppliers' services have been rendered)
The key issue is there any "future economic benefit" associated with the usage of those supplies? In your case, I would like to say no.
(1) No fees will be charged on participants;
(2) The sponsor and government contribute fund for the camping because they willing to do so, not because the organization has bought the supplies.
(3) Use of the supplies in the camping activities will bring benefits (reputation, community commitments etc), they are not ECONOMIC benefits.
So the expenditures on the supplies do not meet the definition and criteria of an asset (not an inventory, my previous use of term "prepaid" is not appropriate, but meet the recognition criteria of an expense.
2. Secondly, from the perspective of fund accounting:
As you mentioned, there exists "deferred contributions", I am guessing that deferral method is used for accounting for the restricted contributions from the sponsors. Under this method, expenses of the current period are recognized as revenue in the fund, so usually the net result would be zero for that fund.
3. The reallocation of the expenses among different funds is not a big issue here since the total revenue to be recognized will equal to the supply expenses.
4. Assume your argument to capitalize the supplies as an asset is correct, according to the deferral method, no contribution will be recognized as revenue since no supplies are recognized as current expenses.更多精彩文章及讨论,请光临枫下论坛 rolia.net
1. I agreed with the BDO's conclusion to expense the supplies but disagree the reason you posted here (suppliers' services have been rendered)
The key issue is there any "future economic benefit" associated with the usage of those supplies? In your case, I would like to say no.
(1) No fees will be charged on participants;
(2) The sponsor and government contribute fund for the camping because they willing to do so, not because the organization has bought the supplies.
(3) Use of the supplies in the camping activities will bring benefits (reputation, community commitments etc), they are not ECONOMIC benefits.
So the expenditures on the supplies do not meet the definition and criteria of an asset (not an inventory, my previous use of term "prepaid" is not appropriate, but meet the recognition criteria of an expense.
2. Secondly, from the perspective of fund accounting:
As you mentioned, there exists "deferred contributions", I am guessing that deferral method is used for accounting for the restricted contributions from the sponsors. Under this method, expenses of the current period are recognized as revenue in the fund, so usually the net result would be zero for that fund.
3. The reallocation of the expenses among different funds is not a big issue here since the total revenue to be recognized will equal to the supply expenses.
4. Assume your argument to capitalize the supplies as an asset is correct, according to the deferral method, no contribution will be recognized as revenue since no supplies are recognized as current expenses.更多精彩文章及讨论,请光临枫下论坛 rolia.net