AS-12 Govt grant

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sonia (Querist)
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23 February 2011 One PSU has transferred some assets/money to another PSU under corporate social responsibility whether assets/money received by another PSU will be covered under AS-12 Govt Grant and what will be the accounting entries of assets/money in the books of the receipent PSU.

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avdhesh varshney

avdhesh varshney (Expert)
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24 February 2011 first of all AS 12 is applied on the transactions from govt and not the govt companies.

second of all - as it is a CSR from company 1 to another company there is no scene of AS 12

now i comes to the a/c entries..
as per as 10 if an asset is received in exchange of some thing other than cash. the valu of the asset would be the fail mkt value of the asset recieved or asset given which ever is more transparent.
here there is no exchange. the asset is received for free.
it should be accounted at a nominal value which the management can decide.

accounting entry will b-
asset a/c dr rs 1
to psu 1 rs 1

then ac of psu 1 will be written off with rs 1!

i hope its clear now !
good luck !