Paragraph 15 of AASB requires what entry by a government department to record the fair value of a donated asset?

Question

Quizplus · Accepted Answer

Paragraph 15 of AASB requires the government department to record the fair value of a donated asset by debiting the asset and crediting revenue. This is because the donated asset is considered a contribution to the department's operations and needs to be accounted for as revenue. Therefore, the correct entry is D: debit asset, credit revenue. Option A (debit asset, credit loan) is incorrect as the asset has not been acquired through a loan. Option B (debit asset, credit revaluation surplus) is also incorrect as revaluation surplus is only relevant in the context of previously owned assets. Option C (would not need to be recorded) is also incorrect as the fair value of the donated asset needs to be recognized in the department's financial statements.

Paragraph 15 of AASB Requires What Entry by a Government