[Anonymous]

Super Seniors is a not-for-profit organization that provides services to senior citizens. Super employs a full-time staff of 10 people at an annual cost of $150,000. In addition, two volunteers work as part-time secretaries replacing last year’s full-time secretary who earned $10,000. Services performed by other volunteers for special events had an estimated value of $15,000. These volunteers were employees of local businesses and they received small-value items for their participation. What amount should Super report for salary and wage expenses related to the above items?

a. $165,000

b. $175,000

c. $160,000

d. $150,000

The correct answer is “C.” According to Becker, expenses from donated services should be included if “it creates or enhances a non-financial asset or require specialized skills that the provider possesses and would otherwise have been purchased by the organization. (ie: Attorney, accountant, and doctor services.)”

So why is secretarial services considered a specialized skill? You don’t need a license to become a secretary. Also, I have an another question. What if I am a CPA who perform accounting services for a nonprofit, but my license is expired?

[Jennifer241]

No, secretary's do not provide a specialized skill. They “create or enhances a non-financial asset”. In order to be counted as payroll expense, it has to meet 1 of the 2 options.

A volunteer replaced a necessary employee, if that volunteer were to leave the non-profit would need to replace the volunteer or hire a secretary. So there is a value that is created there. The non-profit needs to book this as an in-kind donation revenue (CR), and payroll expense (DR).

Think of these questions from a budgeting stand-point. If these volunteers weren't here, would the organization HAVE TO go out and pay an employee to provide the service? For the secretary, yes, someone has to answer the phones for the daily operations, for accountant and lawyers, yes, its a specialized skill that not just anyone can replicate, but volunteers giving time at a specialized event can be easily sought from other volunteers.

AUD - Jan 9,13 Pass
REG - Aug 30,13 Pass
BEC - Oct 26,13 Pass
FAR - Dec 4,13 Pass

Licensed CPA in the state of Oregon

[Jennifer241]

No, secretary's do not provide a specialized skill. They “create or enhances a non-financial asset”. In order to be counted as payroll expense, it has to meet 1 of the 2 options.

A volunteer replaced a necessary employee, if that volunteer were to leave the non-profit would need to replace the volunteer or hire a secretary. So there is a value that is created there. The non-profit needs to book this as an in-kind donation revenue (CR), and payroll expense (DR).

Think of these questions from a budgeting stand-point. If these volunteers weren't here, would the organization HAVE TO go out and pay an employee to provide the service? For the secretary, yes, someone has to answer the phones for the daily operations, for accountant and lawyers, yes, its a specialized skill that not just anyone can replicate, but volunteers giving time at a specialized event can be easily sought from other volunteers.

AUD - Jan 9,13 Pass
REG - Aug 30,13 Pass
BEC - Oct 26,13 Pass
FAR - Dec 4,13 Pass

Licensed CPA in the state of Oregon

[Author]

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