Donation in kind of assets

As per the generally accepted accounting principles . The cost of such asset in the hands of the receiver would be NIL because the receiver has not incurred any expense (If however any expenditure has been incurred then such expense shall be included in the cost of asset)

This asset is a resource controlled by entity and therefore must be recognized and reflected in books and balance sheet. Normally such items are shown at nominal value say Rs 1 or 10 or whatever by way of credit to CAPITAL RESERVE.

Lateron the above asset may be revalued having regards to requirements of AS-10 and the guidance note issued in this behalf. (Basically its that revaluation should be done for ENTIRE CLASS of assets and not any individual item)

If such donations has been received from govt. Then AS-12 Deals with it

Principle is same but AS-12 provides an alternative approach that asset can be recorded at the value equal to the value of grant and such grant shall be capitalized (deferred govt. Grant). And such grant shall be written off (to P&L by way of income) on the systematic basis over the useful life of the asset.

If grant/donation is received for non depreciable asset then such grant shall be shown under capital reserve

READ PARA 8.3 & 8.4 for detailed info.