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Encyclopedia of Accounting - Gracheva R.E. Section II P.1

General scheme of postings for the reflection of operations of gratuitous acquisition of fixed assets

Table 2.14.

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In the table below, you should pay attention to postings 1 and 2. This is very important, because only in this way the amount of additional capital on account 424 is not overestimated. The additional capital may increase due to the gratuitous receipt of assets only for that part of their fair (market) value, which really went to the enterprise free of charge, for yet a certain part of this cost cost the enterprise a certain amount (in our case, 2000). If we do not have the right to evaluate the object above its fair value, then the additional capital item in connection with the receipt of the object received free of charge should increase exactly by the part of the valuation that the enterprise actually received free of charge.

Therefore, acting in this way, we do not overstate the expenses (since we do not spend them on the debit of the expenditure account) and do not overstate the revenues (since the account 424 shows only the net amount of the additional capital received), while to the account 15 (and subsequently to the account 10) this item is acquired at fair value.

Here it is still necessary to note that in the future, if the enterprise bears any other expenses for a certain time in connection with bringing the object received free of charge to a condition suitable for operation, these expenses are also shown by posting:

Thus, in addition to the fact that account 424 will always reflect that part of the fair value of the object received free of charge, which really went to the company free of charge, it turns out that the donated object itself finances itself. And so it should be. After all, it is inadvisable, having received additional capital in the form of an OS object, to spend the costs associated with it, at the expense of some other sources.

It remains to add that in this case we are not talking about any improvements (modernization, additional equipment) of the object received free of charge. In the case where the object is not simply brought to a condition suitable for operation but improves, all costs are spent in the usual way - to increase the cost of the facility (debit 15 accounts with different loans), since in this case the fair value , According to which the object was originally enrolled. Therefore, in the account 424 the share corresponding to the gratuitous part of the new fair value of the object will be taken into account.