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Accouting for Donations in Kind

Khushali Doshi (Working for an NGO) (25 Points)

29 May 2023

How are assets received in donation accounted in books? could anyone please explain?

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7 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 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 ) (14167 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.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 30 May 2023

Need to consider FMV.

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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.

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