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Mike@boiron · 12-10-2009, 04:53 AM

this really is a case of revenue recognition. The owner did not contribute this property, therefore it shouldnt be added to equity. I could be wrong but i would record the asset at FMV and the other side of the entry would be revenue. Maybe defferred revenue until you start completing projects. Lets say you fill an order for 1000 dollars with a discount of 200. So bill 800 and recognize 200 of the deferred income. It sounds pretty close to a Barter situation. I would contact your CPA or whomever prepares your tax return and get their advice.

12-10-2009, 04:53 AM	#2 (permalink)
Mike@boiron Status: Moderator Join Date: Aug 2008 Posts: 45 Rep Power: 26	this really is a case of revenue recognition. The owner did not contribute this property, therefore it shouldnt be added to equity. I could be wrong but i would record the asset at FMV and the other side of the entry would be revenue. Maybe defferred revenue until you start completing projects. Lets say you fill an order for 1000 dollars with a discount of 200. So bill 800 and recognize 200 of the deferred income. It sounds pretty close to a Barter situation. I would contact your CPA or whomever prepares your tax return and get their advice.