my 2 cents: prepaid is some service or goods you paid, but not received, like rent or insurance. You already received the goods, so, it is not prepaid. Inventory is sth has resale value. obviously you do not have inventory. -reenee(螃蟹) @拉斯维加斯华人论坛:拉斯维加斯枫下论坛 The Rolia Forum of Las Vegas

请教，a non-profit organization (charity), year end 在June 30. 因为七月通常会组织camps, 所以在六月购买了大部分的supplies,包括snacks, booklets,& T-shirts, etc.还有预订了机票和住宿（camps 通常在北部). 请问如何处理这些费用？Prepaid 还是 expense them? 谢谢！ -joycezhao(comptable); 2013-9-10 (#74661@41)

我们的auditor, BDO, 认为我们应该在当年expense them 因为suppliers' services have been rendered. 有路过的firm 的同学请吱一声，这是based on 哪个accounting principal. 需不需要考虑matching？跟camps 有关的收入和拨款都将在七月（下一个会计年度）收到。先谢谢了！ -joycezhao(comptable); 2013-9-10 (#74665@41)

If "Camps" event is a revenue earning activity, capitalizing the supplies until the revenue is recognized, otherwise, expensing them when purchased. -toysrus(好奇猫); 2013-9-11 {410} (#74668@41)
But perhaps your organization follows "cash basis/expenditure accounting" rather than "accrual basis/expense accounting". If that's the case, BDO's suggestion makes sense that the suppliers should be expensed in current year.

Try to trace how your organization record cash received.

The correct treatment should be accrual/expense accounting per CICA HB4400.02 and HB1000 (fully applies to NFPOs).
谢谢上面的回复。Expense 是肯定的，现在分歧是在当年expense 还是先prepaid,然后allocate 到下一年的费用中。BDO 要我们在当年expense.想弄明白为什么？ -joycezhao(comptable); 2013-9-11 (#74679@41)

很多NPO走cash basis因为跟政府合同原因。。你们这个camp是否有政府funding支持？或许问你老板更好？ -jessiejojo(jessie); 2013-9-11 (#74680@41)

accural basis, for sure. And the ASNPO (Accounting standards for Not-For-Profit Organizations) is applied. -joycezhao(comptable); 2013-9-11 (#74685@41)
Now governments use accural-basis accounting rule. -rsam007(rsam007); 2013-9-16 (#74815@41)

好奇的问一下，你是对哪级政府现在有用accural-basis.每次我们被financial monitor都因为这个争吵不已。就连最近外出开会。其他NPO也还是有面对这个问题啊。只有年末是破例。谢谢。 -jessiejojo(jessie); 2013-10-3 (#75960@41)

CGA FA4里有专门处理这种情况的章节。 -morningglory12(morningglory12); 2013-9-11 (#74682@41)

谢谢你的回复。不好意思，如果你有FA4 text book (electronic version), 可不可以麻烦你发我一份。email: zhflkw@gmail.com. 先谢谢了。 -joycezhao(comptable); 2013-9-11 (#74683@41)

That's what I explained: Expense immediately or capitalize and expense later. It depends on what rule your organization follows. GAAP regulates it to be capitalized to match the revenue earning activity. -toysrus(好奇猫); 2013-9-11 {207} (#74684@41)
如果你们公司用的是accrual basis+expense accounting, BDO的这个建议是错误的，应该放到第二年再记费用，除非这个camp不能generate revenue。如果你们公司一直是用cash basis+expenditure accounting，BDO的建议是正确的。
谢谢好奇猫的回复。可不可以解释一下如何"capitalize"这些supplies (snacks, T-shirts, & booklets)。如果BDO的建议是错误的（据说他们是经过讨论的）那我如何argue 呢？能提供依据吗？非常感谢！ -joycezhao(comptable); 2013-9-11 (#74687@41)

参见楼下古风的回答。不过我认为你们这个camp本身并不是个revenue generating activity, 因此不存在matching问题。BDO的观点大概基于此。 -toysrus(好奇猫); 2013-9-11 (#74693@41)
古风，thank you for your reference. This is really what I want. 也谢谢楼上各位耐心的回复. :) -joycezhao(comptable); 2013-9-11 (#74704@41)

这些购买的物品和服务已经发生，并且没有resell value，因此不能记在Balance sheet上as assets，只能expensed。 -quicksliman(Hangup on hard fatty); 2013-9-11 (#74688@41)

是否expense immediately不是以有没有resell value来衡量的。 -toysrus(好奇猫); 2013-9-11 (#74694@41)

没看清这是个NFO ,resell value 即为revenue generation purpose. 非GAPP专家捂脸逃开中. -quicksliman(Hangup on hard fatty); 2013-9-11 (#74697@41)

For your reference. -homedream(古风); 2013-9-11 {567} (#74689@41)
To argue with BDO, refer to CICA Handbook Part III Section 1001 Para .45 & .48.

The question is: is there any future economic benefit associated with such expenses? i.e. are all the supplies purchased JUST for the purpose of the camping activities? Is there any inflow of economic benefit from the camping (such as fees collected from participant, fund received from the government because of the camping activities).
If yes, then there ere are future economic benefit associated with the purchases, such purchases should not expensed but capitalized as prepaid.

I think the concern here is about the camp supplies. Since the camping goods have been purchased, there is no prepaid account. Credit Cash, Debit supplies. does not impact any income statement. My personal opinion... -rsam007(rsam007); 2013-9-16 (#74818@41)

打酱油的好奇问问：您这的supplies不是指费用吗?还是准备用它好几年呢？ -hlf(1586); 2013-9-16 (#74820@41)

oh..can be many years can be soon. when it is used, the debit expense, credit supplies. If i am wrong, please correct it. -rsam007(rsam007); 2013-9-17 (#74871@41)

Update! BDO 现要求我们revise 除了机票外的所有其他expenses，比如snacks, T-shirts, shipping fees, etc 都要在当年expense. 不明白为什么？请教各位老法师。 -joycezhao(comptable); 2013-10-1 {388} (#75789@41)
根据上面古风同学的解释，我也check 了每个camp的supporting funds. We don't collect fees from camp participants, but we do have government funds and company sponsorships for each camp. should I consider these funds and sponsorships as economic benefits? The funds we recevied before the yearend have been defered to the new fiscal year.
真心求助各位大牛！不甘心输得这样不明不白啊！先谢了！

BDO 给出这么做的理由是什么？Ask them why？ -jinx99(FAPI); 2013-10-1 (#75791@41)

他们的理由跟下面螃蟹的解释类似。 -joycezhao(comptable); 2013-10-1 (#75796@41)

my 2 cents: prepaid is some service or goods you paid, but not received, like rent or insurance. You already received the goods, so, it is not prepaid. Inventory is sth has resale value. obviously you do not have inventory. -reenee(螃蟹); 2013-10-1 {88} (#75792@41)
It is just like office supplies, you buy them, store in the office, maybe for use later.

http://www.cica.ca/focus-on-practice-areas/governance-strategy-and-risk/not-for-profit-director-series/npo-briefings/item65428.pdf
For the contribution, it seems that they are restricted contribution. I think that is why it should be deferred. -reenee(螃蟹); 2013-10-1 (#75793@41)

That's why I got confused. The funds that contributed to the camps were defered, but costs related to the camps were expensed. What is the purpose doing this? It doesn't make sense to me. I need to be convinced. -joycezhao(comptable); 2013-10-1 (#75797@41)

Do not abuse the matching principle. LOL -reenee(螃蟹); 2013-10-1 (#75798@41)

I understand what you are saying. But in our case, matching contributions and expenses for each program can provide the board more useful information. -joycezhao(comptable); 2013-10-1 {135} (#75815@41)
So I really want to know if there is any accounting principle says we are not allowed to apply matching principle in this case. Thanks.

The flight tickets are some service you paid, but not rendered. -reenee(螃蟹); 2013-10-1 (#75794@41)
We all focused on matching. But, according to your update, there is no matching at all. You do not collect money from the camp. And the restricted contribution is not contributed absolutely for buying those stuff. still just my point. -reenee(螃蟹); 2013-10-1 (#75795@41)

Funds from different companies are restricted on their designated camps, so we seperate the costs for each camp or program. What is why I emphasize on matching as I want to capture all the costs for a restricted fund in one fiscal year. -joycezhao(comptable); 2013-10-1 {208} (#75809@41)
On the other hand, I am not very clear about the purpose they ask us to expense the costs in current year. To better reflect the financial status for only $16,000 expenses?
不好意思，门外汉的想法，不要笑我。

Just try to understand why, forget about challenging BDO. The allocation of costs to each camp is just for information or analysis, not for reporting. When preparing the financial report, you have to follow the rules. My thought. -reenee(螃蟹); 2013-10-1 {211} (#75811@41)
If the fund is restricted to buy a capital asset, when you buy it, you record it as contribution. Now, the fund is used for the camp, not buying the stuff. When you have the camp, you recognize the contribution.

Please refer my rely above. I prefer the matching because we can provide more useful information to the board. They don't want to see expenses for a particlular program were allocated in two fiscal years. -joycezhao(comptable); 2013-10-1 {149} (#75817@41)
I didn't get what you are saying about the restricted funds. Based on agreements, these funds were given us for providing camps in some communities.
Maybe I didn't make myself clear. These supplies (snacks and T-shirts are for students who participate the camps) are used for camps only. -joycezhao(comptable); 2013-10-1 (#75819@41)

Then, what do you want to do with these payments? -reenee(螃蟹); 2013-10-1 (#75821@41)

抱歉如果我让你感觉很aggressive. 说到rules, 你能给我一个reference吗?谢谢！ -joycezhao(comptable); 2013-10-1 (#75822@41)

the link is enclosed in my first post today. Not aggressive. Just felt I already said enough. -reenee(螃蟹); 2013-10-1 (#75823@41)

Thank you for saying so much. Unfortunately I am too stupid to understand you. Anyway, thank you for your replies today. -joycezhao(comptable); 2013-10-1 (#75830@41)

First, the question you raised is a good question, I believe most participants benefit from the discussion. -homedream(古风); 2013-10-10 {1648} (#76467@41)
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

我脚着，如果机票不能退款的话都可以直接进当期费用。跟国内政府事业单位一样，结年前都要突击花钱，否则会影响下一年的预算和拨款。 -tmmsdai(出门靠朋友); 2013-10-3 (#75951@41)

@Las Vegas

my 2 cents: prepaid is some service or goods you paid, but not received, like rent or insurance. You already received the goods, so, it is not prepaid. Inventory is sth has resale value. obviously you do not have inventory.

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