Brought to you by:
More Accounting Tomorrow Posts

# ParenteBeard audits Santa Claus

December 3, 2012

Top 25 Philadelphia-based accounting firm ParenteBeard has made its list—and checked it twice—of all Santa’s expenses ahead of this holiday season.

In balancing the books of the largest imaginary nonprofit in the world, Santa, Inc., the firm’s financial experts found that the North Pole-based organization’s annual operating costs would amount to more than \$42 billion.

“Children around the world are dazzled by Santa Claus and many parents are asked exactly how Santa’s workshop operates,” said Jeffrey Ferro, ParenteBeard president, in a statement. “As experts, we thought why not determine what it would cost to run Santa’s North Pole operation.”

A breakdown of ParenteBeard’s by-the-numbers analysis:

ParenteBeard determined there are approximately 526 million kids under the age of 14 who presumably celebrate Christmas and estimated an average \$75 value for each gift, costing Santa, Inc. roughly \$39.5 billion to produce one gift for every child.
Employee costs: \$2.77 billion

Employee Salaries: \$2 billion

Then, ParenteBeard reviewed the cost of employing the elves. Without knowledge of the number of elves needed to produce a world’s supply of toys, never before revealed, the firm speculates Santa would need 50,000. ParenteBeard then discovered the average salary for a toymaker in the United States to be \$35,859 and, after adjusting for “Santa’s kindhearted spirit,” estimated he pays annual salaries of \$40,000, adding up to \$2 billion.

Health benefits: \$773 million

The firm calculated that the average health care plan for an employer the size of Santa, Inc. to work out to \$15,475 per employee, assuming they were on a family plan.

Electricity costs: \$98 million

Assuming that Santa Inc.’s workshop is double the size of the world’s largest manufacturing plant, ParenteBeard estimates that 8.6 million square feet of space would have to be powered, meaning 95.1 kWh of electricity per square foot annually. The cost of electricity per kWh in the country’s northernmost city, Barrow, Alaska, is \$0.12, the firm discovered, amounting to an annual bill of \$98 million.

Reindeer costs: \$54,000

By comparing reindeer to horses, based on similarity of food and veterinary bills, ParenteBeard calculated an annual ownership cost of \$6,000 per reindeer.

Total Cost to Operate Santa, Inc.: \$42.3 billion

Once ParenteBeard arrived at the final operating cost, the firm determined that Santa, Inc. would likely be incorporated as a private foundation. If this nonprofit status was achieved, the firm has two recommendations: avoid self-dealing and impose salary limits.

“Although nonprofits are tax exempt, they still have risks to consider,” stated Julius Green, practice leader for ParenteBeard’s exempt organization tax group. “Santa still needs to be careful about how he distributes payments and how he runs his operation. Hopefully, he has a trusted business and tax advisor he can rely on.”

A full breakdown of ParenteBeard’s Santa, Inc. audit and the sourced information is included in the graphic below.

#### Trends in the Accounting Profession

##### April 18, 2014

Jim Metzler, former AICPA vice president of small firm interests, and founder of Metzler Advisory Group, talks about how the CPA profession is changing.

#### Lessons in M&A: Client and Staff Retention

##### April 14, 2014

Transition Advisors president Joel Sinkin talks about what firms should do after a merger to retain their clients and staff members.

#### Are You Missing These Growth Opportunities?

##### April 2, 2014

Gale Crosley of Crosley + Company discusses the practice areas and international opportunities that firms often overlook in trying to grow.

### SLIDE SHOW

#### Dumbest Employee Excuses for Being Late

##### March 31, 2014

Running a little late could have big repercussions, especially at a firm in the midst of busy season. From escaped zebras to must-see TV, employers told CareerBuilder some of the most memorable excuses they've heard from tardy employees.

#### Common Taxpayer Misconceptions

##### March 19, 2014

The NAEA’s collection of ridiculous things tax clients believe.

#### The 10 Fastest-Growing Firms in the U.S.

##### March 10, 2014

The firms with the highest 2013 revenue growth in our Top 100 Firms/Regional Leaders list.

#### Top 10 Tech Trends for 2014

##### March 3, 2014

As companies gain more affordable access to new technology and platforms, they also seek to make smarter investments.

#### Strangest Tax Deductions

##### January 31, 2014

The Minnesota Society of CPAs recently conducted its annual survey about the most strange and unusual tax deductions proposed by clients.