Subsidy on term loan
This query is : Resolved
10 February 2012
Dear Experts,
We have a term loan (financial assistance) with SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA and EMI’s are deducted every month (principal + interest). Now SIDBI has issued a letter, stating that our unit has been received CLCSS subsidy from Govt of India of Rs. 2.80 lac so then principal and interest amt reduced in our current month’s E.M.I
My question is what entry to be made for this subsidy in our books ?
We have a term loan (financial assistance) with SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA and EMI’s are deducted every month (principal + interest). Now SIDBI has issued a letter, stating that our unit has been received CLCSS subsidy from Govt of India of Rs. 2.80 lac so then principal and interest amt reduced in our current month’s E.M.I
My question is what entry to be made for this subsidy in our books ?
11 February 2012
why fixed asset ? i think 'subsidy' under indirect income
please give me understand
please give me understand
14 February 2012
Subsidy is not your revenue receipt its capital receipt.It is given on investment in fixed assets.
Therefore the same is to be deferred over its useful life. Reduction in fixed asset would mean lower depreciation.
Therefore the same is to be deferred over its useful life. Reduction in fixed asset would mean lower depreciation.
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