There are two types of donations-in kind, donation without condition and donation with condition.
Donation without condition
Cost of PPE acquired through donation without condition shall be taken up at its fair value at the date it is acquired. All expenses incurred in connection with the donated asset, such as delivery and installation costs, shall be included in the amount recognized as asset. The fair value of the PPE shall be recognized as “income from Grants and Donations in Kind”.
Donation with condition
Where a PPE is acquired through donation with conditions or restrictions, a liability account shall be recognized until the conditions or restrictions have been fulfilled.
- Land (at fair value) xx
Other Deferred Credits xx
To recognize FV of property received as donation.
- Other Deferred Credits xx
Income from Grants and Donations in Kind xx
To recognize income from grants and donations in kind upon fulfillment of condition of the donation.