Please provide me the accounting entries for AS 12, Government grants?
Say the Grant is received for Non-depreciable assets
Case 1: No obligation attached
Bank Account Dr. Rs. XXXX
To Fixed Assets Rs. XXXX
Case 2: Obligation attached
Bank Account Dr Rs.XX
To Deferred Govt. Grant Rs.XX
(In this case the entire amount is divided by the no. of years to which obligation is to be undertaken)
Shivani
(Learner)
(1881 Points)
Replied 13 September 2013
jiju sir
why are we crediting fixed assets?
please explain the first entry
shivani
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 18 September 2013
Dear Shivani,
Case 1: No obligation attached
Bank Account Dr. Rs. XXXX
To Fixed Assets Rs. XXXX
Crediting Fixed Assets here doesn't mean writing off Fixed Assets. whereas in this entry value of Fixed Assets is being reduced by the amount of grant received as no obligation is attached while providing Grant.
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