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Taconic Music Festival: Contributed services be recognized as revenue

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For each of the following situations, indicate whether the organization should recognize the described contributed services as revenue (offset by a corresponding expense). Briefly justify your response or identify key issues.

3. The Taconic Music Festival, a performing arts association, needed new practice facilities. The architecture firm of Lloyd Wright designed the facilities for the association without charge, and local merchants provided the building materials. All construction work was carried out by community volunteers, only a few of whom had professional experience in the building trades.

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Taconic Music Festival has to recognize revenue equal to the fair market value of the ...

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The solution examines contributed service recognized as revenue for Taconic Music Festival.

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Revenue Recognition: Donated Services

For each of the following situations, indicate whether the organization should recognize the described services as revenue (offset by corresponding expenses). Briefly justify your response or identify key issues.

1 Nellie Wilson, the noted country-western singer performs a benefit concert for the Save-Our-Farms Association, a political advocacy group. Wilson, who normally charges $60,000 per concert, did not accept a fee.

2 Camp Chi-Wan-Da, a summer camp for disadvantaged youth, benefits from the services for four physicians, each of whom spend two weeks at the camp providing medical services to the campers. The doctors receive free room and board but no salary. Camp association standards require that a camp of Chi-Wan-Da's size either have a physician on the premises or one on call.

3 The Taconic Music Festival, a performing arts association, needed new practice facilities. The architecture firm Lloyd-Wright designed the facilities for the association with out charge, and local merchants provided the building materials. All construction was carried out by community volunteers, only a few of whom had professional experience in the building trade,

4 A neurologist serves on the board of trustees of the Neurological Disease Foundation, and organization that funds clinical research. He was asked to serve because of his expertise in the area of neurological research and he chairs the board's committee that selects grant recipients.

5 The Museum of Natural History benefits from the volunteer services of twenty docents (museum guides), who provide approximately 10,000 hours of service per year. The docents give tours, staff the information desk, and assist in the museum gift shop. Were it not for their voluntary service, the museum would have to hire employees, who would be paid a least $10 per hour.

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