Because meals are among the “transfers of value” that companies now have to track, it’s important to decide how you will calculate the amount spent per person. According to the regulations, when food or beverage is provided in a group setting, the value of the meal must be reported “only for the covered recipients who actually partook in the food or beverage.” When a company provides multiple meals to participants, LaFrain said she makes the assumption that all participants in the activity partook of all meals provided and will be reported as such unless a participant notifies the company that he or she did not partake in a meal.

The regulations state that when food or beverage is provided in a group setting and the cost of each individual’s meal is not separately identifiable, “the manufacturer must calculate the value per person by dividing the entire cost of the food and beverage by the total number of individuals who partook in the meal” and report the value per person for each covered recipient who partook in the meal, according to 42 CFR § 403.904(h).

When company-sponsored activities include a meal for which the company pays the vendor a guaranteed minimum amount, LaFrain said she takes the position that any amount that the company must compensate the vendor is attributable solely to the guaranteed minimum and is not part of the “cost for food” that must be allocated to the participants in the meal. For example, if the company enters into a contract with a restaurant guaranteeing 50 participants at $50 per plate of food but only 45 participants attend, only 45 participants would be reported at $50 per plate (i.e., the cost of the no-shows’ meals are not allocated across the total attendees). However, if there were 55 participants, each would be fully attributed $50 for food (55 x $50 per plate). Whatever approach you take, the most important thing, LaFrain stressed, is to be consistent. Make sure that your methodology for both meal attribution and allocation is outlined in your assumptions document.