West Virginia University Policy
Division of Administration and Finance

WVU-A&FS-8

GIFTS RECEIVED POLICY

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.

This Policy applies to all WVU units, including those on the regional campuses (Potomac State College of WVU, WVU at Parkersburg, 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).

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 Purchased For WVU Units

The Foundation purchases equipment for WVU units out of private funds contributed to the Foundation. The Foundation provides a periodic listing of such purchases to the Capital Assets and Debt Accounting Unit of Accounting & Financial Systems. The purchased equipment is capitalized on WVU's books in accordance with WVU's capitalization policy and is also reported as Capital 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  Examples of gifts-in-kind include artworks, books, equipment, antiques, coin collections, historical documents and furnishings.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. Gifts-in-kind are capitalized on WVU's books in accordance with WVU's capitalization policy and are also reported as Capital 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. Such cash gifts are recorded as gift revenue on WVU's books.

PROCEDURE

Accounting & Financial Systems is responsible for procedure development.

The responsibility for implementation and interpretation of this policy rests with Accounting & Financial Systems. The specific WVU unit receiving the gift should ensure that all related documentation is forwarded to Accounting & Financial Systems for determination of appropriate accounting treatment.

RELATED DOCUMENTS AND POLICIES

WVU Capitalization policy, WVU Foundation Billing Accounts policy, and WVU Cash Handling policy and guidelines.

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