West Virginia University Policy
Division of Administration and Finance
GIFTS RECEIVED POLICY
Reason For This Procedure:
- To establish requirements for recording and accounting treatment of gifts, including noncash gifts (such as equipment or property), received directly by West Virginia University (WVU or the “University”) units or WVU regional campuses.
To Whom Does This Procedure Apply:
- This Procedure applies to all WVU units, including those on the regional campuses - Potomac State College of WVU, WVU Institute of Technology, Charleston division of the Robert C. Byrd Health Sciences Center, Jackson’s Mill State 4-H Conference Center and Camp, and the WVU Farms – and the West Virginia University Research Corporation.
Voluntary exchange of value or benefit from or to another party without directly giving or receiving equal value in exchange.
Gifts of physical property intended for use by the institution in its educational or research programs.
- The WVU Foundation (the “Foundation”) exists for the purpose of securing and administering private gift funds to support University programs. Donors should be encouraged to direct all gifts to the Foundation. Occasionally gifts may be sent directly to a specific WVU unit; an outside entity, such as the Foundation, may reimburse expenses incurred by WVU units; or the outside entity may disburse funds on behalf of WVU resulting in an economic benefit to the University. Such transactions should be recorded as gifts on WVU’s books. Transactions that constitute gifts may be categorized as follows–
1. Equipment and Library Materials Purchased For WVU Units
- The Foundation purchases equipment and library materials for WVU units out of private funds contributed to the Foundation. The Foundation provides a periodic listing of such purchases to WVU. If these purchases meet the criteria for capitalization per WVU’s capitalization policy, these assets are capitalized on WVU’s books and Capital Gifts Revenue is recorded. If these purchases do not meet the criteria for capitalization, an expense is recorded on WVU’s books along with Gifts Revenue.
2. Gifts-In-Kind (Donated Assets)
- Gifts-in-kind are gifts of physical property intended for use by the institution in its educational or research programs. Examples of gifts-in-kind include computer software, artworks, books, equipment, antiques, coin collections, historical documents and furnishings. Such gifts are made directly to the Foundation for the use and benefit of WVU. The Foundation transfers such gifts-in-kind to the University that are then tagged and recorded as part of the University’s inventory in accordance with WVU’s capitalization policy. The Foundation provides a comprehensive list and related documentation for such gifts-in-kind to WVU. Gifts-in-kind are recorded on WVU’s books at their fair market value, usually estimated by the donors. Fair market value is defined as an amount that a willing purchaser would pay in the normal market. If these gifts meet the criteria for capitalization per WVU’s capitalization policy, these assets are capitalized on WVU’s books and Capital Gifts Revenue is recorded. If these gifts do not meet the criteria for capitalization, an expense is recorded on WVU’s books along with Gifts Revenue.
3. Third Party Reimbursement Of Expenses Charged To A University Account
- If an asset, as defined under WVU’s capitalization policy, is purchased, constructed or capital improvements are made by a WVU unit and an outside party reimburses all or some portion of the purchase price/construction or improvement costs, an asset should be recorded on WVU’s books at full cost or fair market value and capital gift revenue should be recorded for the full value received from the outside party.
- The Foundation reimburses WVU for certain expenses initially paid by the University. Such reimbursement occurs through the use of the Foundation billing accounts. When expenditure is incurred, it is recorded as an expense on WVU’s books. When reimbursement is received from the Foundation, it is recorded as gift revenue.
- It should be noted that a gift should not be recorded as a credit to expense (expenditure reduction). This understates both the amount of the actual expense and the amount of total gifts to the University.
4. Invoices Paid By An Outside Party On Behalf Of WVU
- If an asset, as defined under WVU’s capitalization policy, is purchased, constructed or capital improvements are made by a WVU unit and an outside party directly pays the vendor on behalf of the University, an asset and capital gift revenue should be recorded on WVU’s books.
5. Monetary Gifts
- Gifts received in the form of cash, checks or credit cards are considered cash gifts and should be deposited in accordance with WVU’s cash handling policy and guidelines. This includes payments from the Foundation on behalf of another WVU unit (for example, for payment of goods or services provided to the WVU unit). Such cash gifts should be recorded as gift revenue on WVU’s books.
6. Fringe Benefits Paid by the Foundation on Behalf of WVU
- The Foundation pays for certain fringe benefits of WVU employees on behalf of WVU. Examples include moving expenses, retirement gifts and meal expenses. The Foundation provides WVU with a periodic report of these payments made on behalf of WVU. A Fringe Benefits expense and Payments on Behalf of the University are recorded on WVU’s books.
- The responsibility for procedure development of this policy rests with Institutional Accounting, Reporting and Analysis.
- The responsibility for implementation of this procedure rests with Institutional Accounting, Reporting and Analysis. The specific WVU unit receiving the gift should ensure that all related documentation is forwarded to Institutional Accounting, Reporting and Analysis for determination of appropriate accounting treatment.
- The responsibility for implementation and interpretation of this policy rests with Institutional Accounting, Reporting and Analysis. The specific WVU unit receiving the gift should ensure that all related documentation is forwarded to Institutional Accounting, Reporting and Analysis for determination of appropriate accounting treatment.
- Additional information or questions regarding this procedure can be obtained by contacting Institutional Accounting, Reporting and Analysis at 304.293.4008.
- Capitalization Policy: IARA - http://iara.wvu.edu/policies
- West Virginia University Foundation Billing Accounts: Financial Services - http://financialservices.wvu.edu/polices
- University Wide Cash Handling Policy: Financial Services - http://financialservices.wvu.edu/polices
Originally Issued: July 1, 2010
Updated: February 8, 2016
Approved by: Daniel A. Durbin, Senior Associate Vice President for Finance