As a for-profit entity, my company must record the amount of the donation as an expense at the fair value of the donated asset. In this case, my company must recognized a loss of eight thousand dollars, simply because the fair value of my donated asset is two thousand dollars. Furthermore, I must update my books by debiting “Contribution Expense” and “Loss on disposal of x asset” for $2,000 and $8,000 crediting the asset for $10,000. In this case, the fair value of my asset was lower than its book value forcing me to recognize a loss on my contribution.
FASB ASC 845-10-30-1 In general, the accounting for nonmonetary transactions should be based on the fair values of the assets (or services) involved, which is the same basis as that used in monetary transactions. Thus, the cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the asset surrendered to obtain it, and a gain or loss shall be recognized on the exchange. The fair value of the asset received shall be used to measure the cost if it is more clearly evident than the fair value of the asset surrendered. Similarly, a nonmonetary asset received in a nonreciprocal transfer shall be recorded at the fair value of the asset received. A transfer of a nonmonetary asset to a stockholder or to another entity in a nonreciprocal transfer shall be recorded at the fair value of the asset transferred and a gain or loss shall be recognized on the disposition of the asset. FASB ASC 845-10-30-2 The fair value of an entity's own stock reacquired may be a more clearly evident measure of the fair value of the asset distributed in a nonreciprocal transfer if the transaction involves distribution of a nonmonetary asset to eliminate a disproportionate part of owners' interests (that is, to acquire stock for the treasury or for retirement). If one of the parties in a nonmonetary transaction could have elected to receive cash instead of the nonmonetary asset, the amount of...
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