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Level 2

Receiving in-kind donations of fixed assets

My charity frequently receives in-kind donations of fixed assets such as telescopes (worth hundreds or thousands of $$).  I understand how to depreciate fixed assets already on the books in QBO but I don't understand how to record such a donation when we receive it.

4 Comments
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Level 15

Receiving in-kind donations of fixed assets

You typically have a Donation Income item, when you get funds. This is sort of the same thing, but as "get funds and use them to buy the thing they gave for equal value."

 

You will use a service item linked to Donation In Kind, as income. You put that on a donation form (sales receipt) and "pretend" to deposit it to a Bank account you use for Barter or Clearing. For this same date, you enter the expense to buy that given thing for that same value. Now your clearing bank = $0.

 

This is only a Fixed Asset for you if you are gong to Use it. DIK can be tangible goods or expenses such as printer paper. If that is something you are going to use, then you would enter on that expense transaction that you "bought" this as Fixed Asset. You might get tangible goods that you sell, to raise money. Example:

 

I donate a telescope and you value it at $5,000. You have a $5,000 donation in kind value, but the expense entry for you might show this is Cost for items to be sold at a fundraiser auction and not your Fixed Asset at all. This part of "what we got" doesn't change because of how you got it. DIK is the same as buying .

Highlighted
Level 2

Receiving in-kind donations of fixed assets

Thanks, qbteachmt, that's helpful.  The key is using a clearing account and treating the donation as if it were in cash and "buying" it internally at the same price.  I get it.

 

Typically we either give these scopes away at raffles or loan them to our members--we're an astronomy club.  Obviously if we give them away that's an expense at the time equal to the depreciated value of the item if we've had it long enough to depreciate it.  If we loan it to a member, then I would keep it on the books and depreciate it over time.

 

The value when we receive it is indeed its Cost, as you said.

 

Do you agree?

Thanks again,

Cidrolin

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Level 15

Receiving in-kind donations of fixed assets

I recommend the book Running QB for NonProfits, by Kathy Ivens.

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Level 2

Receiving in-kind donations of fixed assets

Thank you, Kathy, I'll take a look!

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