A local CPA volunteered time to prepare Form 990 for an after-school development organization. If the services had not been donated, the organization would have had to hire a CPA to prepare the return. In accordance with the FASB Codification, the value of the CPA's time devoted to helping the organization should be recorded as:

• A. Support Expense.
• B. Donation Revenue.
• C. Program Service Revenue.
• D. Not Recognized.

Answer: (A)

Donated professional services are treated as an in-kind contribution, but the value is shown as an expense rather than as program revenue. In this case, the CPA’s time spent preparing the Form 990 is an administrative service that does not produce a nonfinancial asset or a direct program deliverable. Therefore, the fair value of the donated services is recorded as a support expense, reflecting the cost avoided by not paying for the service. It isn’t program service revenue because it doesn’t generate or support a specific program output, and it isn’t not recognized because the organization did receive a measurable benefit.