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jakjr
September 29, 2024
Question

Fixed Asset Value on Balance Sheet

  • September 29, 2024
  • 2 replies
  • 0 views

Two years ago, our non-profit was gifted a property (building and land) by the County--Sales Price was $10.00. Within the Fixed-Asset Chart of Accounts, I entered the Property with its Sales Price (as $10 debit and $10 credit).

 

Tomorrow, I need to submit a current Balance Sheet and not sure how to update the Balance Sheet to reflect the property's current market value which is $331,260.  

 

Thank you.

2 replies

FishingForAnswers
FishingForAnswers
September 29, 2024

@jakjr  Short answer: You don't.

 

Long answer: The value of the asset on your books is the value of the asset when you acquired it.

 

It is necessary to keep it at that value in your books to properly handle any future sales or disposals of said asset.

 

Otherwise, pretty much every asset's book value would constantly be fluctuating, depreciation calculation would be an absolutely unholy mess, and figuring the capital gains tax on the sale of assets would be an even worse legal minefield.

Rainflurry
Rainflurry
October 1, 2024

@jakjr 

 

As @FishingForAnswers mentioned, the asset stays on your books at historical cost BUT, the value of the property received should have been entered at the fair market value (FMV), not $10, when received.  This is because the donor is entitled to a tax deduction of the FMV and your non-profit should have had a corresponding donation of that amount.  At this point, you need a good CPA.      

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