Final answer:
The donation of an art collection is recognized as a contribution or asset when the collection is permanently held and preserved by the recipient organization. The recognition happens when the ownership is irrevocably transferred and the recipient has all responsibilities associated with the donated art's maintenance and preservation. Donations are recorded as assets at their fair value at the time of donation.
Step-by-step explanation:
The donation of an art collection is recognized as a contribution or asset when the art collection is permanently held and preserved (option d). Here, 'permanently held' refers to the condition or restriction that the donor puts on the donation. It implies that the organization receiving the donation should not sell or dispose of the art collection. 'Preserved' means that the organization has the responsibility to take care of the donated artworks, ensuring they are kept in good condition for public viewing or exhibition purposes.
The timing of the recognition is typically when the title to the donated art collection is irrevocably transferred to the recipient entity, in other words, when the entity gains control over the asset with all associated risks and rewards.
Donation
indicates a voluntary action, where the owners transfer their art collection to a particular entity without expecting to receive equivalent value in return. The entity then records the artworks as an asset, using their fair value at the time of donation.
Learn more about Art Collection Donation