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 service is performed by a volunteer with no specialized skill.
• B. The service has a monetary value readily measurable.
• C. The service requires a specialized skill and is provided by someone with that skill.
• D. The service requires a specialized skill and is provided by someone who possesses the specialized skill.

Answer: (D)

Contributed services are recognized as both a contribution and an expense only when the services require specialized skills and are provided by someone who possesses those skills, and they would typically be purchased if not donated. This ensures the organization records the value of professional, skill-based services that it would normally buy.

The best choice states that the service requires a specialized skill and is provided by someone who possesses that specialized skill. That directly aligns with the requirement that the service actually hinges on specialized expertise and is delivered by a qualified individual, indicating the organization would have to pay for it if it weren’t donated. The other options fail to fully meet that specialized-skill condition or imply scenarios that don’t qualify for this dual recognition (for example, a non-specialized or unverified skill context, or lacking the explicit implication that the service would be purchased).