Question

Why is specific donation capitalised?​

Answer 1

spacific donation is a donation recieved for a spacific purpose say for constructing a building specific

donation are not charged to income and expenditure account rather capitalised and shown on the liabilities

side and any expencess on the of the same are deducted from the fund

Answer 2

Question :

Why is Specific Donation Capitalized?

Answer :

What is Specific Donation means?

• Specific donation is a donation received for a specific purpose say for constructing a hall, organising a match, constructing a school or pavilion, etc. (for special purposes).

What is capitalization of donation means?

• It is the amount which a Not For Profit Organization will receive as per will of a deceased person. It is shown on the debit side of receipts and payments account. It should be capitalized being an item of non-recurring nature and should be shown on the liabilities side of the Balance Sheet.

Now, why is Specific Donation Capitalized?

As it is donated by the the person for specific purpose for example for constructing a pavilion then that money must be used for that purpose only. That donation must not treated as income for the Organisation. So, it is always capitalised.

$I hope it helps you ☺️✌$