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Treatment of legacy

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Treatment of legacy

Posted by Sonal Chauhan 5 years, 4 months ago

CBSE > Class 12 > Accountancy

1 answers

Gaurav Seth 5 years, 4 months ago

Legacy : Legacy represents the amount or property received by organization under a will on death of the contributors. In other words we can say that ligacies are the donations made by a person in his will, so their donation are called legacy.

(i) Legacies received for a specific purpose must be capitalized in the name of concerned fund for which it is received.

(ii) Legacies received not for any sprcific fund/general may be added to the capital fund.

Example :
Mr. Shyam lal writes his will that his property will be transferred (after his death) to a Not-for-profit Organization. After death of Mr. Shyam lal, his property will be treated as capital receipt by concerned Not-for-profit Organization under the head legacy.

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