A plant site donated by a township to a manufacturer that plans to open a new factory should be recorded on the manufacturer's books at

Question

Quizplus · Accepted Answer

The plant site donated by the township should be recorded on the manufacturer's books at its market value. This is because the site is an asset received by the manufacturer, and it should be recorded at fair value, which represents the economic benefit of the asset to the company. The nominal cost of taking title to it or a value assigned by the company's directors may not represent the fair value of the asset, and recording the site at one dollar would not accurately reflect its economic benefit to the company.

A Plant Site Donated by a Township to a Manufacturer