Grant accounting
This query is : Resolved
14 December 2013
Can grant received from govt. be shown under the head other non current liabilities in the balance sheet?
14 December 2013
its possible if its for more than 1 year
14 December 2013
There are 2 methods for accounting grants recd.
A. Amortising the grant during the life of the asset for which such grant was recd. by crediting p&l a/c. every year. In this case, bal. amt. it is to be disclosed below reserves and above loans in balance sheet.
B. Setoff the grant amount to the value of the asset and chatge depn. on the reduced value of the asset as per applicable rate.
Note: In case grant is recd. against a non depreciable asset, then it is to be treated as capital reserve.
Thanks!
A. Amortising the grant during the life of the asset for which such grant was recd. by crediting p&l a/c. every year. In this case, bal. amt. it is to be disclosed below reserves and above loans in balance sheet.
B. Setoff the grant amount to the value of the asset and chatge depn. on the reduced value of the asset as per applicable rate.
Note: In case grant is recd. against a non depreciable asset, then it is to be treated as capital reserve.
Thanks!
15 December 2013
Agreed with Ram sir ....!!
15 December 2013
@ P.V.Ram Ji
Ref:- Clause A
Seems balance amount should be shown in 'reserves and surplus' as per revised schedule VI since an additional 'line item' in between 'reserves' and 'loans' can't be created.
Ref:- Clause A
Seems balance amount should be shown in 'reserves and surplus' as per revised schedule VI since an additional 'line item' in between 'reserves' and 'loans' can't be created.
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