interest income on subsidy
This query is : Resolved
08 December 2010
Situation is
Government has provided subsidy for acquiring the depreciable fixed asset. The subsidy amount i have deposited in bank until acquiring the asset. I have earned/received interest on the amount deposited.
My question what is the accounting treatment for interest earned on subsidy which is deposited in bank ?? whether it is deducted from respective fixed asset or accounted as interest income ?
Government has provided subsidy for acquiring the depreciable fixed asset. The subsidy amount i have deposited in bank until acquiring the asset. I have earned/received interest on the amount deposited.
My question what is the accounting treatment for interest earned on subsidy which is deposited in bank ?? whether it is deducted from respective fixed asset or accounted as interest income ?
08 December 2010
Subsidy is generally given only when fixed asset has been purchased.
In my opinion, as we are capitalising any item related with the fixed assets till it is put to use, likewise you may take the interest as (negative) expenditure and deduct from the cost of respective fixed asset.
In my opinion, as we are capitalising any item related with the fixed assets till it is put to use, likewise you may take the interest as (negative) expenditure and deduct from the cost of respective fixed asset.
10 December 2010
Yes, Shri Bafnaji is correct. The interest earned on this is to be deducted from the Cost of Capitalising the asset.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Inventory of finished goods
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Tds on building rent monthly
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- RCM INVOICING FROM NOV-2024
- Confusion around Form 26QB fields
- REGARDING ACCOUNTING CODE FOR SERVICE TAX PAYMENT
- Redevolpment of bldg in mumbai
- Refund of AY 22-23
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
