During the year, a local merchant donated a building to the City of Stage Coach. The acquisition value of the donation at the date of the gift was $600,000. At what amount should this contribution be recorded in the governmental activities accounts at the government-wide level?

During the year, a local merchant donated a building to the City of Stage Coach. The acquisition value of the donation at the date of the gift was $600,000. At what amount should this contribution be recorded in the governmental activities accounts at the government-wide level?

• A. 300,000
• B. 350,000
• C. 250,000
• D. 600,000

Answer: (D)

In government-wide financial statements, donated capital assets are recorded at their fair value on the date of receipt. Since the building’s acquisition value at the date of the gift is $600,000, the government records the asset at $600,000 with a corresponding contribution revenue. The other amounts would reflect values that don’t match the fair value at the donation date, which is the measurement GASB requires for contributed capital assets.

In government-wide financial statements, donated capital assets are recorded at their fair value on the date of receipt. Since the building’s acquisition value at the date of the gift is $600,000, the government records the asset at $600,000 with a corresponding contribution revenue. The other amounts would reflect values that don’t match the fair value at the donation date, which is the measurement GASB requires for contributed capital assets.