2 Accounting Issues You Need to Understand

Allocating the costs in this way provides donors a much clearer and more accurate understanding of how a nonprofit spends its money. So far so good, right?

But … in a disturbing development, and in total disregard for the IRS and AICPA, some self-anointed charity watchdogs are making headlines by unilaterally proclaiming that they won’t honor joint cost allocation. The result? Needless confusion among the giving public by arbitrarily assigning all the costs of a complex activity to “overhead,” instead of allocating the costs to where they honestly belong.