How to Record Donated Personal Protective Equipment (PPE)

CPAs & Advisors

Timothy Crosson Jr.
Timothy Crosson Jr. CPA Principal CPAs & Advisors

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During the COVID-19 pandemic, school districts received monetary relief from the federal government, but local businesses and communities also helped by donating materials such as personal protective equipment (PPE). How should a school district’s financial records reflect the donated materials received?

Treat the donated PPE similarly to donated commodities. GASB 33 and N50 Nonexchange Transactions in GASB’s Codification of Governmental Accounting and Financial Reporting Standards offer guidance on recording donated materials. The PPE should be recognized as revenue in the school district’s governmental fund statements in the period when all applicable eligibility requirements are met and the resources are available. The school district should record the expenditures following its supplies policy – either as supplies inventory or an expenditure when the revenue is recognized. 

The school district should have documentation for how it determined the revenue it recognizes. Maintain records for the quantity of PPE received as accurately as possible – counts performed by the school district or lists provided by the donor are the best documentation to have available. Additionally, the school district should have a basis for valuing the PPE received. If the donor did not provide the value, the school district could use the market prices of similar PPE at the time of donation. 

School districts should also maintain records and disclose any donated PPE the donor purchased with federal sources. Disclose the amount of donated federal PPE as a separate footnote in the Schedule of Expenditures of Federal Awards (SEFA) at the fair market value of time of receipt.  The amount will not be considered for determining single audit thresholds and is not required to be audited as a major program.

We continue to receive many questions related to accounting for the 2021 school year, and we are here to help you navigate those challenges. Please reach out to your Yeo & Yeo professionals for assistance.

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