Accounting for government grants

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Monica jain (Querist)
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07 April 2016 Dear All,

The query is produced below -

"Company was entitled to get some grant on % of on investment made in Plant & Machinery in backward area in 2010. Since, there was uncertainty in collection, company didn't booked it on accrual basis. However, the grant was later received in 2016. What should the correct accounting treatment now in 2016 as per Ind AS-20.

Shall it be credited to deferred govt. grant in balance sheet and recognised in profit or loss over the remaining useful life of such plant and machinery or it shall be directly credited to Profit or loss account."

Thanks in advance

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2016 It shall be credited to govt grant in the balance sheet and credited to P and L account proportionately to the extent of depreciation charged in each year.

Message likes : 1 times

Monica jain

Monica jain (Querist)
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11 April 2016 Thank you sir. The query is resolved. Can you please provide the relevant para in Ind AS, opinion or study to support the same.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 April 2016 Refer para 12 of INDAS 20. I am not able to paste here the para.

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