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increase the amount of the contribution received by Museum B in the acquisition. [FAS 164, paragraph A88, sequence 189.1] Consistent with paragraph 958- 605-25-19, contributed collection items shall not be recognized as a contribution received if collections are not capitalized. [FAS 116, paragraph 13, sequence

    • 31.1


      • >

        > Example 2: Collection Items Received in an Acquisition—Contribution

or Purchase

958-805-55-51 This Example illustrates application of the guidance in paragraphs 958-805-25-23 through 25-24. Museum D, which has a policy of not capitalizing its collection, acquires Museum C. To effect the acquisition, Museum D agrees to transfer cash consideration of $1,600 to a foundation designated by Museum C. As part of the acquisition, Museum D acquires 800 paintings owned by Museum C. Museum D adds all of Museum C’s paintings to its collection. The fair values of Museum C’s assets and liabilities other than collection items at the acquisition date follow. [FAS 164, paragraph A89, sequence 190.1]

Cash Accounts receivable Contributions receivable Property, plant, and equipment Liabilities assumed Identifiable net assets other than collections



100 50 75 675 (200) 700

[FAS 164, paragraph A89, sequence 190.2]

958-805-55-52 It is unclear whether the collection items were contributed or purchased because the fair value of the consideration transferred is $1,600, which exceeds the aggregate of the identifiable net assets acquired (excluding the collection items) of $700. The excess $900 paid could be attributable entirely to either the collection items or goodwill, or part could be attributed to the cost of the collection items and part to goodwill. [FAS 164, paragraph A90, sequence

191] 958-805-55-53 In this circumstance


if Museum

D determines that the

acquisition-date fair values of the collection items are far greater than $900, it would presume that $900 of the excess relates to the cost of the purchased collection items and that the remainder of the excess relates to contributed collection items. Consistent with how purchased collections are reported in paragraph 958-360-45-5, that $900 cost would be reported as a decrease in the appropriate class of net assets in the statement of activities in the period of the acquisition. No goodwill or contribution revenue would be recognized. [FAS 164, paragraph A91, sequence 192]


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