8 Replies
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 16 October 2021
That is also like depreciation for intangible assets.
Software is amortised
Machinery is depreciated
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 16 October 2021
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 16 October 2021
In grants business, there are two methods to accont for asset grants
1. Direct method- reduce the grant amount from asset and then depreciate
2. Indirect method- reduce the asset value by depreciating and then reduce the grant amount.
Both the ways, results are the same. However, you have to amortise the grant annually for both the processes.
eg. if grant amount is 60,000 and asset life is three years
then grant amount= twenty thousand
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 16 October 2021
in cash flow statement it will be shown under investing activities
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 16 October 2021
If the asset is purchased on loan, it will be classified as financing activity. As 3 doesn’t have this classification but IndAS doesnt as well. IAS 7 classifies it as both investment and financing. But since cash is involved, it’s into cash flow statement.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 16 October 2021
In IndAS and as, cash receipts from refund of loans and advances must be used to recognise.
Recent Topics
- Expire stock
- INCOME TAX AY 25-26
- Experienced CA firm for accounting & auditing
- Regarding Perquisite Tax on ESOP - Unlisted Compan
- Casual Taxable Person under GST
- Extended Date of GSTR-1 for the month of July 2020
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
Related Threads
CAclubindia
