Gifts to Company
Posted: 20 Sep 2019, 16:55
Hey Guys
I have a question regarding the best approach in terms of accounting to fixed assets or other asset one can capitalize recieved as a gift.
I have the following approach:
D-Fixed assets
C-Deferred Income
H: Gift recieved from entity X
D-Depreciation Fixed asset
C-Accumulated depreciation
H: asset depreciation
D-Deferred Income
C -Income
H: recognition/realization of gift income ( with the same method as the depreciation method of the underlying asset).
Since the benefits of the asset will flow over time using the asset, I think this approach is reasonable to recognize the income.
Do you have any alternative to this method?
I have a question regarding the best approach in terms of accounting to fixed assets or other asset one can capitalize recieved as a gift.
I have the following approach:
D-Fixed assets
C-Deferred Income
H: Gift recieved from entity X
D-Depreciation Fixed asset
C-Accumulated depreciation
H: asset depreciation
D-Deferred Income
C -Income
H: recognition/realization of gift income ( with the same method as the depreciation method of the underlying asset).
Since the benefits of the asset will flow over time using the asset, I think this approach is reasonable to recognize the income.
Do you have any alternative to this method?