The California Assembly has passed and sent to the Senate a bill which would require specific accounting for charities who receive gifts-in-kind which are restricted by the donor for distribution outside the U.S.
For that very specific type of GIK, the bill would require the donation to be recorded at the fair value in the country where the items will be used.
This will particularly affect donated pharmaceuticals, which often have a severely different value in the U.S. compared to values internationally.
My perception is the bill would apply to a very small number of charities, perhaps something in the range of three dozen (wild guess) across the country. Affected charities would primarily be those involved in the relief and development sector.
My other blog, Nonprofit Update, has lots of discussion on GIK in general and this bill in particular.
If you are interested, you can check out the following posts about AB 1181:
- Legislative effort in California to change accounting for Gifts in Kind – part 1
- Legislative effort in California to change accounting for Gifts in Kind – part 2
- Other discussion of A.B. 1181, which would change accounting for GIK limited for distribution outside U.S.
- Committee analysis of California AB 1181
- What is the primary, core concern of the AG community over charity financial statements?
- What is the specific, focused target of California AB 1181?