CHAPTER 29 A-FN-105-001/AG-001 29-1 ACCOUNTING FOR ...

CHAPTER 29
A-FN-105-001/AG-001
Current PIK (PIK to be used in the period of receipt - the current accounting
period)
25. Upon receipt of the properly authorized source documents from the authorized
Agent, Current PIK revenues for goods and services used and the offsetting expenses
are simultaneously recognized on the sponsorship income statement and have a nil
effect on the bottom line of the Sponsorship Income Statement.
Deferred PIK (PIK not used in the period of receipt - the current accounting
period)
26. PIK assets are reported for control and management information purposes when
PIK is received in one accounting period and will not be used until a future accounting
period or periods. Upon receipt of the properly authorized source documents (proof of
receipt of PIK, such as packing slip), then the deferred PIK will be set up as a fixed
asset Class 20. PIK will not be amortized. It is reported as a fixed asset only to record
the value of the PIK on the balance sheet. The offsetting accounting action is to
unearned PIK revenue – sponsorship and donations. All deferred product-in-kind is to
be reported within the fixed asset records. PIK is subsequently recognized as revenue
in the same future period or periods as the related expenses that they were intended to
fund are recognized.
27. PIK received for an event (i.e. case of soft drinks) that is surplus upon completion
of the event, may be sold for fair market value as determined by the Authorized Agent
rather than disposed of or earmarked for another event. For control and record
purposes, PIK received for a fundraising event such as an auction, shall be recorded as
PIK in the same manner as PIK for internal use as detailed in para 25 and 26 above.
Cash received for sale or auction is recorded as Sponsorship Revenue Cash (net of tax)
and PIK revenues/expenses are reduced by the net amount.
Summary of Accounting Action
28. Annex A provides a summary matrix of the accounting action for Sponsorship,
Donations, and Product-in-Kind.
Year-End Procedures
29. Each year, during the month of March, the BComd shall appoint a Board to verify
the disbursement register and current inventory of PIK. The Board will identify:
a. unserviceable items;
b. missing items; and
c. any other discrepancies.
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