How are assets received in donation accounted in books? could anyone please explain?
7 Replies
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(177852 Points)
Replied 30 May 2023
If its tax free...
Dr. Asset acc.
Cr. Capital acc.
Khushali Doshi
(Working for an NGO)
(25 Points)
Replied 30 May 2023
Thank you for the reply Sir. At what price would the asset be accounted in the books? Have doubt in value as the asset is received in donation. is it FMV or Re 1?
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 30 May 2023
Is this assets are received from Government? and are you a Non profit organisation?.
Khushali Doshi
(Working for an NGO)
(25 Points)
Replied 30 May 2023
Asset is NOT received from the Government. We are a Non Profit Organization.
Sanjana Mohanty
(100 Points)
Replied 30 May 2023
When assets are received as donations, they are accounted for by recording them at their fair market value on the books of the organization. This involves recognizing the donated asset as an increase in assets and an equal increase in either revenue or a specific donation account. The fair market value of the donated asset is determined based on its current worth in the market.
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 30 May 2023
Sir , where it is written FMV , any guidelines ?. what is the documentary evidence of FMV for Audit Purpose ?.
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