A citizen of York purchased a truck in 20X3 for $50,000.On June 10,20X9,she donated the truck to York.The fair value of the truck on the date of donation was $30,000.How should York report the truck in its government-wide Statement of Net Assets?

Question

Quizplus · Accepted Answer

When a government receives a donation, it should recognize the donation as revenue and the donated asset as an asset at its fair value. In this case, the fair value of the donated truck is $30,000, so York should increase its machinery and equipment by $30,000. The fact that the citizen purchased the truck for $50,000 is irrelevant to how York reports the asset in its financial statements.

A Citizen of York Purchased a Truck in 20X3 for $50,000.On