Crestview Secondary Academy is a private non-profit high school offering grades 9 to 12. It has just implemented a laptop program in the school. Every student from Grade 11 and up will receive a laptop that they will use for their time at the school. The academy will own these laptops but the student will be able to buy it for $1 at the end of secondary school.
The board of directors is currently discussing the implementation of this program and how to reflect it on the academy's financial statements. They have agreed that they will need to increase school fees to pay for the cost of these laptops but do not want to bill it as a separate cost. The director of finance suggested that the cost be allocated over the years at school. The president of the board is proposing that the school fees in Grade 11 be increased by the cost of the laptops since that is the year that the student will actually receive the laptop. The IT director points out that the students in grades 9 and 10 will still get access to laptops, which are on carts and brought to the classrooms. She maintains that the laptop program actually begins in Grade 9. The board members are also interested in ensuring that they have a mechanism to evaluate the laptop program financially.
You have been called to the most recent board of directors meeting to discuss the accounting and reporting of the laptop program. The members would be interested in hearing your opinion.
Prepare the report to the board of directors.