A government is the recipient of a bequest of a multi-story office building that the government intends to use as a new city hall.The building has a historical cost of $850,000; a book value in the hands of the benefactor of $700,000; and a fair value of $1,050,000.The city should recognize on its governmental fund financial statements donations revenue of
A)$-0-.
B)$700,000.
C)$850,000.
D)$1,050,000.

Question

Quizplus · Accepted Answer

Governmental fund financial statements do not recognize donations revenue for capital assets like buildings. Instead, they record the asset at its fair value and recognize it in the government-wide financial statements.

A Government Is the Recipient of a Bequest of a Multi-Story