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What should be the double entry of Gift Received ?

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Question ajoutée par Adil Ali , Accounts Officer , Falcon Holdings LLC
Date de publication: 2014/07/02
Muhammad Hassan khan
par Muhammad Hassan khan , Assistant Collector , Khyber Pakhtunkhwa Revenue Authority

Dr: Gift received

Cr: Gain 

Ammad Khan
par Ammad Khan , Senior Finance Officer-Audit , Islamic Relief Pakistan

Dr Asset (if cash or Asset item)

Credit:Gift (Income)

Khaled Mohee Eldeen Abbas Mahmoud
par Khaled Mohee Eldeen Abbas Mahmoud , Chartered Accountant # 10465 , Self-employed

Debit asset account ( cash\\ bank\\ asset)

Credit ( gift \\ Capital) account 

Abdul Wasay Hassan
par Abdul Wasay Hassan , Deputy Manager Internal Audit , Pak Suzuki Motor Company Ltd.

The recording of the gift would be based on nature, lifetime and materiality of the gift. If the gift is usable or has a material value addition to the business like a fixed asset machinery or painting it would be recognized in an asset of approprite category hence a debit, In terms of credit several approaches are acceptable recognizing it as other an income item and getting it refelected to Owners equity via PnL, or alternatively it can be treated as a reversal to gift and soveniours expenses already being incurred by the company (especially if it is regifted). Small, financially imaterial (to the company items) (meal vouchers, pens, calenders, diaries or cups) and one-off items that are not considered material are not usually reflected in accounts but are transffered/ditributed to staff in the relevent dept though based on managment discretion.

Hujat Ullah Khan
par Hujat Ullah Khan , Group Financial Controller , SAED Alraeda Group

If it is Fixed Asset. Dr Fixed Assets

                                      Cr Deffered Income

Charge to P/L as the asset depreciates proportionally. Dr Deffered Income

                                                                                                         Cr P/L

If it is Current asset

                                    Dr Current Asset

                                         Cr P/L

Adil Ali
par Adil Ali , Accounts Officer , Falcon Holdings LLC

Thanks  for All of u ..it is really helpfull

Mohammed Farooque Khatri
par Mohammed Farooque Khatri , Assistant Group CFO , Al Dakheel Group

Debit Asset (Cash Bank)

Credit Other Revenue

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