Question

Under current US GAAP, assets that have been donated to a company are recorded at fair...

Under current US GAAP, assets that have been donated to a company are recorded at fair value. In at least three paragraphs, support one of the positions presented below. You should use references to reference material, as necessary.

Argue that donated assets should not be reported in a company's balance sheet or argue in favor of the current GAAP treatment for donated assets.

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Answer #1

Answer:

Donated assets- Assets that are given as donations to the company.

Donated assets should not be reported in a company's balance sheet. Donated assets are non reciprocal transfer, company has not given up anything to acquire donated assets.

Other assets that are recorded in the balance sheet, have effect on both the sides, company is aquiring assets but also spending cash on acquiring while in donated assets, company is not spending any cash. Nothing was spent to acquire the asset hence donated asset does not have any historical value so it will not be reported in the balance sheet.

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