How to Record the Transfer of Rs. 12300 Crores of Wipro to Trust

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Recently, I read the news that big Indian IT company Wipro transferred Rs. 12300 Crores Shares to Non Profit Educational Trust. This is good trend. More big corporate should follow this trend. Only then, we can bring revolution in the sector of Education. Now, if you are the accountant of Wipro or accountant of Trust, then how will you record this. If you don't know, we are explaining its simple procedure. You must read this.

Procedure of recording this transfer is very simple:

(A) As the Accountant of Wipro

If you are the accountant of wipro. You have donated shares not cash. So, Trust will become your shareholder (Investor). They will have all the rights like vote and getting dividend for promoting their non-profit organisation. We will pass follow journal entry.

1. When donation is given to Trust.

Donation of Shares  Account Dr. Rs. 12,300 Crores

Trust Account Cr. Rs. 12,300 Crores

{ You can either show this donation as your revenue expense or capital nature expense because with given donation is not investment nor it is the payment for getting service. It is just given for mind peace. It will also increase your long term goodwill. So, you can close this account by transferring to profit and loss account's debit side or you can show it as asset. Every year you have to written off this account by transferring some part to profit and loss account.}

 2. When, trust gets the right on Share Capital

Trust Account Dr. Rs. 12,300 Crores

Share Capital Account Cr. Rs. 12,300 Crores

{Trust account will not any balance but we will register the name of trust on our given shares}

(B) As the Accountant of Trust 

Trust is non profit organisation. When it gets donation in the form of fund, it is its capital nature fund. At that time, it will pass following entry.

Shares in Wipro Co. Account Dr. Rs. 12300 Crores

Donation Under Premji Foundation Fund Cr. Rs. 12300 Crores

{ Now, we show shares in wipro co. account as investment asset in the balance sheet. We also show donation under premji foundation fund as fixed liability in the balance sheet}

Learn Our more Resources of the Accounts of Not-For Profit Organisation

1. Income and Expenditure Account of Not-For Profit Organisation 
2. Balance Sheet of Not-For Profit Organisation 






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Accounting Education: How to Record the Transfer of Rs. 12300 Crores of Wipro to Trust
How to Record the Transfer of Rs. 12300 Crores of Wipro to Trust
Accounting Education
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