Gifts under IFRS...!?

Question

Dear AllGood Day!Let suppose i am running a good business. One of my friend give me2 Mercedes as a gift to my company. How we will adjust this gifted items in our accounting system according to IFRS. if we include in our Fixed Assets, Can we depreciate with the passage of time. Kindly share your valuable & quality knowledge. Thanks

AHMAD OMAR CMA-CertIFR · Answer

I think the asset will be recorded as its Fair Market Value, by debiting Fixed Asset & Crediting Other Revenue.

If a company has received the gift, I think there's no need to compute and record the depreciation.

Thank you for your invitation :)

Ahmed Akande · Answer

I think IAS 20 should apply and be treated as donated asset ( Deferred Income) because you are not giving anything back in reciprocal... you debit the appropriate asset account and credit Donated Capital account... this will be adjusted to P/L to reduce the donated capital account and recognise it as other income on P/L

Mohammad Iqbal Abubaker · Answer

The best and correct Answer added by: AHMAD OMAR-CMA Senior Accountant 2 days ago

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Gifts under IFRS...!?

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