501c3 - Equine Therapy - Horses as assets? Valuation?

[lmazz70]

Hello -

I'm the bookkeeper for a non-profit that provides therapeutic riding lessons for special needs kids / adults utilizing rescued horses.  This is the first year we've officially been a company and a non-profit.  The horses are almost entirely rescues that the owner acquired before we became a 501c3, but there are several that we purchased or were donated since then and I have a few questions on how to show them on the financial statements.

Are these horses treated as inventory, or assets to be depreciated?  What is the valuation method used?  Use the purchase price (if one), and depreciate from the time the horse was put into service at the non-profit?  I assume we need to provide a bill of sale / proof of ownership for anything we intended to depreciate.  What if the horse was donated?  Does it have any book value at all and if so, how do we determine the value?

Should the purchase price (if any) just be expensed in the year of the purchase?  The purchase prices are nothing crazy...only a few thousand dollars if that. 

Thanks for your help!

[rjs]

You are not likely to get knowledgeable answers to your questions in this forum. The purpose of this TurboTax support community is to help people prepare their personal tax returns using TurboTax. We only deal with questions about tax returns, not accounting or financial statements. And since TurboTax cannot be used by non-profit organizations, very few, if any, of the people who participate here are knowledgeable in that area. You should seek advice from an accountant who is experienced in non-profit accounting.