Donated Capital Asset Governmental funds normally do not report capital assets or donated capital assets.

If a school district intends to sell rather to keep donated capital assets, revenues may be reported if either of the following conditions is met: a. b. the asset is sold prior to the end of the fiscal year, and the proceeds of the sale are available; or the asset is sold (or the district has entered into a contract to sell the asset) prior to the issuance of the financial statements, and the proceeds of the sale are considered available.

If the proceeds of the sale are not considered available, a receivable and a liability for deferred revenue would be recogni ed in the appropriate governmental fund only at the time the district finally entered into a sales contract. !therwise, the donated asset should be treated like a capital asset used in the government"s operations until a sale occurs. Example 1: #n used vehicle is donated to school district $%& which sold it for '(),))). *he sale occurred before #ugust +(. ,elow are the appropriated -ournal entries in governmental fund: .ebit General 0edger #ccount 12) 34) /ash on .eposit with /ounty 5evenue67ales of donated vehicle '(),))) '(),))) /redit

Example 2: 7chool district $%& signed an agreement with its buyer to sell a donated building prior to issuance of its financial statements. *he estimated sales price was '()),))). ,elow are the appropriate -ournal entries: .ebit +2) 89) #ccounts 5eceivable .eferred 5evenue : 7ales of ,ldg '()),))) '()),))) /redit

When building is sold: 12) 34) 89) +2) /ash on .eposit with /ounty '()),))) 5evenue67ales of donated ,uilding .eferred 5evenue : 7ales of ,ldg #ccounts 5eceivable '()),))) '()),))) '()),)))

Donated Assets (not Capital Assets) (Voluntary Nonexchange ransactions)

;rivate companies and<or individuals might donate cash or assets (not capital assets) to school districts, the recognition of revenue or deferred revenue and e=penditure is re>uired when all eligibility re>uirements are met or when there are no eligibility re>uirements. If the donation is announced in advance and the school district believes that the collection is probable, the school district should recogni e a receivable and a revenue. ?ligibility re>uirements means conditions or criteria and time period imposed by donors. Example !: # private individual donated '9,))) cash to a school district to be used at any time, and for any purposes deemed appropriate by the school district. *he following -ournal entries should be recorded: General 0edger #ccount 12)

.ebit /ash on .eposit with /ounty '9,))) 34) 5evenue : .onations '9,)))

/redit

If the donor announces a year before paying it and the collection is probable, the district should recogni e a receivable and a deferred revenue when the donation is announced, as follows: .ebit +2) 89) #ccounts 5eceivable : .onor .eferred 5evenue : .onations '9,))) '9,))) /redit

When Cash is "ecei#ed$ 12) 34) 89) +2) /ash on .eposit with /ounty 5evenue : .onations .eferred 5evenue : .onations #ccounts 5eceivable : .onor '9,))) '9,))) '9,))) '9,)))

Example %$ # private individual donated supplies worth '1,))) to a school district to be used at any time and for any purposes deemed appropriate by the school district. ,elow are the appropriate -ournal entries: .ebit ?=penditures : .onated 7upplies 5evenues : .onated 7upplies '1,))) '1,))) /redit

Donated &er#ices ;ayments of salaries and benefits made on behalf of the district"s employees for services rendered to the district, are re>uired to record as revenues and expenditures/expense in the fund receiving the services. *he Governmental #ccounting, #uditing, and @inancial 5eporting (G##@5) recommended that school districts follow @#7, statement Ao.((4 for donated services by volunteers, because G##; is silent on this issue. ;er @#7, statement Ao. ((4, the recognition of revenue and e=pense is limited to those services that meet one or the other of the following criteria: the donated service creates or enhances nonfinancial assets (e.g., volunteers improvements to a capital asset); or the donated service re>uires speciali ed skills, and is provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation (e=amples: accountants, architects, doctors, lawyers, etc.)

Example ': /ompany #,/ agrees to provide one half of a school district"s bookkeeper for total amount of '(9,))). ,elow are the appropriate -ournal entries: General 0edger #ccount 9+) 34) ?=penditures : .onated 7al.<,en. 5evenue : .onated 7al.<,en.

.ebit '(9,)))

/redit '(9,)))

Example ($ #n accountant from a private company donates his<her time to work on setting up Bedicaid #dministrative Batch billings. *he total time spent on the pro-ect was (9 hours. @or that type of work, the market rate is '2) per hour. ,elow are the appropriate -ournal entries ('2) = (9 hours C '4))): .ebit 9+) 34) ?=penditures : .onated 7ervices 5evenue : .onated 7ervices '4)) '4)) /redit