Accounting entries for accepting donated equipment
Borrow: Fixed Assets
Taxes Payable - VAT Payable (Input Tax)
Credit: Non-Operating Income
Fixed Assets are a kind of tangible assets with the following characteristics: the enterprise for the purpose of producing commodities, providing labor services, leasing or business management. labor, rental, or business management, and has a useful life of more than one fiscal year.
Accounting entries for equipment donated by an enterprise
Borrow: Fixed Asset Liquidation
Accumulated Depreciation
Provision for Impairment of Fixed Assets
Credit: Fixed Assets
Borrow: Non-Operating Expenses
Credit: Fixed Asset Liquidation
Taxes Payable- -VAT payable (output tax)
Fixed assets are damaged, technologically obsolete, or for other economic reasons, resulting in their recoverable amount being lower than their carrying value, a situation known as impairment of fixed assets. If the recoverable amount of a fixed asset is less than its carrying value, a provision for impairment should be made for the difference between the recoverable amount and the carrying value, and recognized in profit or loss for the current period.
How is non-operating income understood?
Non-operating income belongs to the profit and loss account, and the debit side indicates a decrease and the credit side indicates an increase. Non-operating income is an integral part of the financial results of the enterprise, and has no direct relationship with the production and operation process, so it should be included in the current profit of the income. Non-operating income refers to the enterprise's daily activities are not directly related to the proceeds, including non-current assets destroyed and scrapped proceeds, inventory profits (limited to cash surpluses can not identify the cause), donations, fines, debt restructuring profits and indeed can not be paid in accordance with the prescribed procedures approved by the transfer of non-operating income payable, and so on.