Accounting Entries Of Building Acquisitions For The Foundations Abstract
Foundations need to acquire buildings for various reasons and generally accomplishe this by way of purchases and construction.Significant amount of resources used primarily for these acquisitions are conditional or unconditional contributions of either cahs or in-kind. Methods of recording expenditures of buildings acquisition are “expense recording”, “capitalization of expenses” and “first expense recording and later capitalization of expenses”.The expense recording method shows the acquired building on the final budget and the income statement, but not on the balance sheet, that is the drawback of the metehod.The acquired building appears as an asset on the balance sheet in the capitalization of expenses method but the contributions used to acquire the building don’t appear on the final budget.and the income statement. With the first expense recording and later capitalization of expenses method, the building appears on the balance sheet and the revenues and expenditures related to the acquisition of the building appear on the final budget and the income statement.Expense recording and capitalization of expenses methods are simple, easily applicable and understandable, and they are widely used in our country. While the method of “first expense recording and later capitalization of expenses” seems complicated, it provides detailed financial data on the balance sheet, the final budget and the income statement. This method may be appopriate for corporate foundations and meets the requirements of legal regulations.
Volume (Year): 21 (2012)
Issue (Month): 1 ()
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