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Tracking donations of fixed assets

Before recording a donation of a fixed asset item, talk to your accountant about how to calculate the value of the fixed asset donation and whether you need to enter an additional adjustment to accumulated depreciation. The value you assign to the donation cannot be more than the purchase price minus the amount you have already depreciated.

Example of calculating the value of a fixed asset

You bought a truck for $12,000 and have already depreciated $5,000. The maximum value you can assign to the donation is the remaining $7,000 that has not been depreciated.

  1. Using a sales receipt, enter the sale of the fixed asset item for a $0.00 amount.

    Enter the name of the charity as the customer:job.

  2. Save and record the sales receipt.

  3. Assign the donation to your Charitable Contributions account by entering a general journal transaction.

    Using the value you calculated for the fixed asset, debit the Charitable Contributions account and credit the fixed asset account. In the following example, $7,000 is debited from the Charitable Contributions account and credited to the Truck account.

    Debit

    Credit

    Charitable Contributions

    $7000

    Truck

    $7000

  4. Enter a general journal transaction to clear your Accumulated Depreciation account and fixed asset account.

    Using the total amount you have depreciated over the lifetime of the fixed asset, debit your Accumulated Depreciation account and credit the fixed asset account. In the following example, $5000 is debited from the Accumulated Depreciation account and credited to the Truck account.

    Debit

    Credit

    Accumulated Depreciation

    $5000

    Truck

    $5000

See also

KB ID# H_V_CHARITABLE_DONATIONS_FIXED_ASSETS
12/5/2016 10:42:47 AM
PPRDQSSWS400 9138 Pro 2017 590903