Accounting for Donated Assets Received
(1) The composition of contributions received will not be limited to cash but will include other assets like building, land, use of utilities or facilities, securities, intangible assets, supplies, services, including unconditional promises to grant these items. These other assets will be booked at their fair market value.
(2) The company should disclose all its existing policies, on the matter of recording all assets received that do not have specific donor-instructions.
(3) Other assets in the forms of art work, historical artifacts and the likes are not considered as donations if it was added to the non-profit entity’s collections, only for purposes of exhibit, education or research to enhance the entity’s socio-civic services, or if they were entrusted for safekeeping and preservations, or if there is an organizational policy that the transferred collection is saleable wherein the proceeds will be used to purchase additional collections for the non-profit institute.
(4) Other assets not considered as donated contributions but used to carry–out the missions of the non-profit organization shall be capitalized and will not be done on a selective basis. If there are other asset contributions received and found in the premises of the non-profit organization but not recognized in the recipient entity’s books, they will be reported as Contributions Received.
(5) All transactions that increase or decrease the non-profit entity’s collection shall be reported and disclosed in full detail, detailing all circumstances and amounts surrounding the nature and results of such transactions; including reimbursements received from insurance claims. This is regardless, if the asset received was capitalized or not, in the books of the entity concerned.
(6) The non-profit company should institute a policy on how gifts of long-lived assets given without explicit restrictions about the specific time-period for its use, will be recognized in their books. Such policy will prescribe whether it should be classified as Restricted or Unrestricted Support.