Accounting for non refundable grant received under National Livestock Mission Scheme.
This query is : Resolved
30 August 2025
Assesse received Subsidy from central government under National Livestock Mission Scheme. It is nonrefundable in nature. Can it be credit in in full to PL as Extraodinary Nature income ? What will be the correct accounting treatment for the same ??
30 August 2025
Government grants that are similar to promoter contributions ought to be credited to the capital reserve.
30 August 2025
The subsidy provided under the National Livestock Mission should generally be treated as a grant related to assets, not income.
The scheme primarily provides a "capital subsidy" for the establishment of livestock, poultry, piggery, and feed/fodder units, which means the funds are meant to help finance the purchase or creation of long-term assets like breeding farms, machinery, and infrastructure.
According to accounting standards, such capital subsidies are best classified as government grants related to specific assets, to be amortized in the Profit & Loss (P&L) account over the useful life of the relevant asset.
The subsidy reduces the cost of the asset or is treated as deferred income, recognized in the P&L over the depreciation period of the asset.
The scheme primarily provides a "capital subsidy" for the establishment of livestock, poultry, piggery, and feed/fodder units, which means the funds are meant to help finance the purchase or creation of long-term assets like breeding farms, machinery, and infrastructure.
According to accounting standards, such capital subsidies are best classified as government grants related to specific assets, to be amortized in the Profit & Loss (P&L) account over the useful life of the relevant asset.
The subsidy reduces the cost of the asset or is treated as deferred income, recognized in the P&L over the depreciation period of the asset.
30 August 2025
But in this case different assets have different useful life. Also a part of subsidy is for working capital. So how to determine how much amount to be credited to PL as deffered income. ??
01 September 2025
If the grant is received by a sole prorietorship organisation can it be directly transffer to capital account.
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