What is benevolence and donation expense?
submitted by t1

roody

It's generally a donation. It can be accounted for a couple different ways. Sometimes it can be a deduction, but there are certain criteria that would have to be met. If it were a sponsorship, it would be considered an advertising expense.

flowing salt

Benevolence and donation expenses are in the category of charitable contributions or "community support expenses."

More specifically, benevolence is charitable giving that a company or organization does. It's recorded as an expense in the income statement, often under a line item like "Charitable Contributions" or "Donation Expenses."

They're considered operational expenses if they are part of the company’s ongoing activities. These donations are not tax-deductible unless they meet specific criteria. So, definitely check that out first.

Morton

Donation expenses are money or other resources that a business gives away to support some type of charitable cause. It's recorded as an expense when the donation is made. It's a little different though, because unlike some other expenses, donation expenses are not directly tied to the core business activities like sales or manufacturing.

Companies should disclose their donation expenses transparently in their financial statements. They may want to include notes explaining the nature of the contributions. Most companies are happy to do that, as it's good for reputation.

Many places allow deductions for charitable donations, but there are rules about documentation and limits based on the company’s income. So, when you see donation expenses in financial statements, they’re not always about giving back. They could also be part of a tax planning strategy, or have PR purposes. Not judging. Just the way it is.