Question

According to the FASB Codification, which of the following is a condition that must be met for contributed services to a not-for-profit organization (NFP) to be recorded as both a contribution and as an expense?

a) The services create or enhance nonfinancial assets.
b) The services require specialized skills.
c) The services are provided by individuals.
d) The services are provided by employees.

Answer 1

According to FASB Codification, for contributed services to a not-for-profit organization to be recorded as both a contribution and an expense, one condition that must be met is that the services require specialized skills.

Step-by-step explanation:

According to the FASB Codification, for contributed services to a not-for-profit organization (NFP) to be recorded as both a contribution and as an expense, one condition that must be met is that the services require specialized skills. This means that the services provided must require expertise or specific knowledge in a particular area.

For example, if a volunteer accountant offers their services to a not-for-profit organization to help with financial statements, this would meet the condition of specialized skills and the services provided would be recorded as both a contribution and as an expense.

It is important to note that the other options mentioned in the question, such as the services creating or enhancing nonfinancial assets or being provided by individuals or employees, are not conditions that must be met for the services to be recorded as both a contribution and as an expense.