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Accounting Treatment For Office Parties

Where do you expense a Company Holiday party to? Allocation or G&A? Please provide logical reasoning behind your choice.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

T&E. Since it is entertainment.

Will Ou
Title: Sr. Financial Analyst
Company: none
(Sr. Financial Analyst, none) |

what department?

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

If it is a company party, that it is a company expense. If you allocate rent, then you can allocate the same way. It is totally arbitrary how you do it, but it is entertainment and only 50% deductible on taxes.

Randy Moore
Title: CFO
Company: SJB Bagel Makers
(CFO, SJB Bagel Makers) |

Company parties are 100% tax deductible if all employees are invited, though not all need to attend.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I stand correctly, the key word is a) all employees, b) families are permitted, c) it's not too "lavish" and d) no customers, vendors are invited.

I have yet to be at a company party that hasn't invited key advisors, like the corporate counsel, outside accounting professional etc...

Jeff Durbin
Title: Chief Financial Officer
Company: F. Gavina and Sons, Inc.
(Chief Financial Officer, F. Gavina and Sons, Inc.) |

I agree with Randy. We have two accounts - 50% deductible meals and 100% deductible meals - to track these AND make it easier on our auditors. Of course, they take a look at the items we are claiming in 100% deductible but so far they are happy with our decisions and documentation.

Didier Jupillat
Title: CFO
Company: Atlantic.net
(CFO, Atlantic.net) |

I agree with Wayne, it's entertainment. However, personally I prefer to keep track of typical T&E (related to sales and therefore to customers) separately from employee-related entertainment, which I keep as an HR account (G&A), like training or continuous education, and use also for other "feel-good benefits" like coffee or snacks or any other type of office parties. Now, whether you prefer to reallocate among departments is up to you. It's all based on how you want to analyze your expenses.

Amit Parekh
Title: Accounting Manager
Company: Push Innovation
(Accounting Manager, Push Innovation) |

Its a corporate expenses and charging per department would not be feasible. Employees attending the holiday party will vary per department and for some department the expenses will be more and for some department expenses will be less.

Amit Parekh
Title: Accounting Manager
Company: Push Innovation
(Accounting Manager, Push Innovation) |

can affect the budgetary allocation for that department

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