Question: Treasurer Report - Line Item expense
Our PTSA has an unexpected expense that is "goodwill". It is a very small amount ($35) that our PTSA will need to absorb as a "goodwill" item and we need to pay the fundraising vendor. Our PTSA is a Section 501 (c)(3) and I need guidance in how to show the expense in our treasury report so it appears correct for our audit. Any help or recommendations would be appreciated - what line item expense is best?
Asked by mcoughlin
Advice from PTO TodayCraig writes:
I'm interested to know what the item is. Goodwill in accounting is typically an amount paid for something more than the actual value -- both the buyer and seller acknowledge the extra amount as goodwill. The buyer shows it as an expense in a separate line item called goodwill, and the seller does the same as income. The only use I know of is in the purchase of a business -- ie the business has assets valued at $1 million, but a buyer pays $2 million. In general, without knowing the specifics, I think I would simply list the extra $35 as a fundraising expense. Just make sure you create a record of what the expense was for and you should be fine.
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