A donor gave equipment valued at $50,000 at the beginning of 2014 to a private not-for-profit organization.The equipment had a 10-year life and depreciation of $5,000 was charged during 2014.At the end of the year,the net assets to be reported in unrestricted net assets related to this equipment would be:

Question

Quizplus · Accepted Answer

The net assets to be reported in unrestricted net assets related to this equipment would either be $45,000 or $0, depending upon the policy of the organization. 
If the organization follows the policy of capitalizing the equipment and charging depreciation annually, then the net assets to be reported would be $45,000 ($50,000 - $5,000). 
However, if the organization follows the policy of expensing the equipment as a one-time cost, then the net assets to be reported would be $0.

A Donor Gave Equipment Valued at $50,000 at the Beginning