How to record a motor vehicle which has been donated for nil $
I am unsure of the general ledger transaction for donating a vehicle which has accumulated depreciation
Best Answer
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@LynnP Is the entity receiving the donated MV a DGR (Deductible Gift Recipient) ?
I've been giving this some more thought & I now believe the Sales Receipt should be for the MARKET VALUE at the time of donation. If the recipient is a DGR, this asset sale (income) will then be offset by the donation (expense) ! 😬
Shaz Hughes Dip(Fin) ACQ NSW, MICB
*** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! *** Bookkeeping & 1-on-1 customised software Training/Troubleshooting ***
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Answers
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Was the MV acquisition recorded using a Fixed Asset Item or just posted direct to the relevant Asset account ?
If just posted to the account, create a Fixed Asset Item (I would normally just name this as per the rego eg 1XXX XXX)
Set up the donation beneficiary as a Customer in your Customer List
Create a Sales Receipt (or Tax Invoice) for the beneficiary dated the date of "Donation", using this new Item, at a rate of $ 0.00.
At EOFY, your Tax Agent will depreciate the MV up to this date & determine any balancing adjustment necessary.
Shaz Hughes Dip(Fin) ACQ NSW, MICB
*** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! *** Bookkeeping & 1-on-1 customised software Training/Troubleshooting ***
* Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *
Accounted 4 Bookkeeping Services
Ballajura, WA
(NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
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many thanks that is basically what I did but I was concerned about the clearing of the depreciation account I’ll leave that to the end of the year
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