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Donated goods question

Do you record distributed goods as expenditure?

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We are using Receipts and Payments accounting as a small charity. We record donated goods for distribution to beneficiaries as an income under A1 Receipts. Should we also be recording the outgoing goods as expenditure under A3 Payments when we give them away? To give a practical example, someone donates a sleeping bag to us and we record that as an income of £15. Do we then record it as expenditure of £15 when we give it away?

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By Portia Nina Levin
01st Feb 2018 14:08

Is the donation of goods the incoming of a resource and is the giving away of the goods an outgoing of a resource?

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By WhichTyler
01st Feb 2018 15:05

Para 6.23 of the SoRP refers (though you don't have a stock account to balance the income/expenditure)

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By Bobbo
01st Feb 2018 19:20

I believe the SoRP reference quoted by my fellow contributor is not relevant as receipts and payments accounts are not prepared in accordance with the SoRP.

I will state that I have never prepared R&P accounts as at the firm I work for all charity accounts are prepared on the accruals basis irrespective of size.

I did look at the Receipts and Payments Accounts Introductory Notes issued by CCEW. These state that a feature of r&o accounts are that you ‘record cash movements only’. They also state that “gifts of assets... are not included in receipts and payments accounts” but gifted assets would appear in the statement of assets and liabilities.

In summary, the notes suggest that not only should you not record a sleeping bag as expenditure when you give it away you should also not be recording a £15 sleeping bag as income when you receive it.

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