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Transfers of Capital Assets

Authority:
GASB 48, paragraph 15

Effective Date:
7/1/2007

Policy:
Capital assets should not be revalued when transferred between funds and/or component units of the State’s financial reporting entity. In these circumstances, the transferee should recognize the capital assets at the transferor’s carrying value. These intra-entity transfers include donations or purchases/sales of capital assets between any combination of the funds and/or component units of the State’s financial reporting entity including State agencies, universities, community colleges, and all other component units of the State.

(Note: Intra-entity donations of capital assets should not be reported at fair value as of the date of donation, as was previously required.)

Example

Component Unit A donated a building with an original cost of $400,000 and accumulated depreciation of $150,000 to Component Unit B. The building had a fair value as of the date of donation of $1.2 million.

Component Unit B would make the following accounting entry:

Caption	Debit	Credit
Building	$400,000
Accumulated Depreciation		$150,000
Capital Gift Revenue		$250,000

Component Unit A would also recognize a corresponding expense of $250,000.