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Grant asset accounting

shiva kumar R (Salaried) (80 Points)

30 May 2012

Hi All,

Can anyone explain how account grant assets in company books can grantee claim depreciation on grant assets if yes procedure

Thanks

Shiva Kumar

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3 Replies

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 30 May 2012

There are two methods for accounting for grants in relation to Fixed Assets as per AS-12. One is deduct the value of gratn received from the cost of FA & calculate yearly depreciation on the balance amount. Thus the grant wud be recognised in P&L in the form of reduced depreciation.

On tha other hand show the gratn received as liability on the B/S & tranfer the same to P&L every year in proprotion to depreciation available for the grant.

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Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 30 May 2012

On tha other hand show the gratn received as liability on the B/S & tranfer the same to P&L every year in proprotion to depreciation available for the grant.

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Prachi Srivastava (Finance) (368 Points)
Replied 04 July 2014

Originally posted by : Giridhar S Karandikar
	There are two methods for accounting for grants in relation to Fixed Assets as per AS-12. One is deduct the value of gratn received from the cost of FA & calculate yearly depreciation on the balance amount. Thus the grant wud be recognised in P&L in the form of reduced depreciation. On tha other hand show the gratn received as liability on the B/S & tranfer the same to P&L every year in proprotion to depreciation available for the grant.