Hi,
Amongst the following,
Government grants,
Subsidy,
Capital allowances,
50 percent discount sale,
Which of them will give rise to temporary difference in deferred tax? Is a government grant given like a claim or cash only?
4 Replies
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 23 March 2021
Subsidy, Capital allowances can rise to temporary difference.
Government grant can be both paid in cash or in kind
Government grant can be both paid in cash or in kind
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 23 March 2021
That is comforting and I knew about capital allowances but not grants. So grants cannot give rise to temporary difference liability because a grant will reduce the carrying amount in two methods and assets tax base always be higher. Correct?
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 23 March 2021
Grant can be recognised by deducting from cost of the asset or by deferred the grant by life of the assets in profit and loss account as same as depreciation is calculated on life of the assets
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 23 March 2021
So does it give rise to deferred taxes?
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