If the entity received a donated asset the entity must:
A) recognise an asset.
B) recognise a liability.
C) recognise an income.
D) recognises an asset and an income.

Question

Quizplus · Accepted Answer

When an entity receives a donated asset, it should recognize the asset at its fair value and also recognize the contribution revenue or income at the same amount as the fair value of the donated asset. Therefore, the correct answer is option D which states that the entity should recognize both an asset and an income.

If the Entity Received a Donated Asset the Entity Must