The Accounting Review Vol. 23 No. 2 1948
DONATED FIXED ASSETS.
Abstract
Even the most convincing advocates of the cost basis of valuation and income determination in accounting are impelled to approve an exception in the case of donated fixed assets. Most of the writers agree that donated fixed assets should be recorded at appraisal figures by an entry debiting fixed assets. There are those who see no objection to crediting paid-in surplus or capital surplus, depending upon the sources of the donation and tim suggested breakdown of the surplus accounts. Most sources concede that the admission of donated fixed assets to the accounts at appraisal figures is inconsistent with the cost basis of accounting. But, instead of recommending that the donated assets be recorded at the nominal figure of one dollar, the booking of the asset at appraisal figures is not only recommended but preferred. Those who profess the cost basis of accounting not only advocate the booking of donated fixed assets at appraisal figures, but frequently acquiesce in the charging of depreciation on donated fixed assets to revenue. The recording of donated fixed assets at appraisal figures is not consistent with the cost basis of accounting.
- DOI
- 10.2308/tar-7053553
- Volume
- 23
- Issue
- 2
- Pages
- 171-178
- Language
- en
- Sources
- openalex crossref