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

Question

Quizplus · Accepted Answer

The plant site should be recorded on the company's books at its fair value, which is the amount for which the property could be exchanged between knowledgeable, willing parties in an arm's length transaction. This ensures that the company's balance sheet reflects the economic value of the asset. Additionally, recording the site at its fair value ensures compliance with accounting standards such as IFRS 13, which require fair value measurement for certain types of assets.

A Plant Site Donated by a City to a Company