FundSvcs Community

When we receive a gift of private placement stock and determine the value, is it correct to record them as we would a publicly traded stock?  Or more accurate to record it as we would a Gift in Kind of a different type of object?  It feels different because whereas there is real and immediate value to us for a publicly traded stock (we can sell it and take the cash), with private placement stock we have to hold on to it until (and only if) it goes public, at which time it could be worth a ton, or nothing.

I do not know how you record publicly traded shares. But they are also gifts of property (or GIK). So both are entered into the development database with a description and estimated FMV. Only the description shows up on the receipt.

You won't find a value on the normal exchanges for private stock. Usually, those are accompanied by an appraisal or statement from the CFO or CPA. However, to your point, these shares are usually not entered on the GL with an immediate asset value, given the often difficult process in liquidation.

John

My advice would be to use a gift type that provides the fields you want, including # of shares and price per share at sale, as well as different fields for your valuation on receipt and the proceeds you receive on sale. Distinguishing the private stock from the public stock is easy enough -- the private stock won't have a high/low avg price on the date of donation, whereas public stock will. When you get the private stock gift, several fields will initially be blank, because you're not immediately selling the stock, but once you do, it will be easier if you can fully capture the details of the gift in one place.  

If your CRM allows you to create a separate gift type with the right fields, I can see the appeal of that approach too.