During the year, a local merchant donated a building to the City of Stage Coach. The acquisition value of the donation at the date of the gift was $600,000. At what amount should this contribution be recorded in the governmental activities accounts at the government-wide level?

• A. 300,000
• B. 350,000
• C. 250,000
• D. 600,000

Answer: (D)

In government-wide financial statements, donated capital assets are recorded at their fair value on the date of receipt. Since the building’s acquisition value at the date of the gift is $600,000, the government records the asset at $600,000 with a corresponding contribution revenue. The other amounts would reflect values that don’t match the fair value at the donation date, which is the measurement GASB requires for contributed capital assets.