Accounting of governemnt grants
This query is : Resolved
07 December 2012
company has received government grants in connection with depreciable asset. how account income for the year
CA PARAS BAFNA
(Expert)
07 December 2012
Accounting Standard -12
1. Government grants related to specific fixed assets should be
presented in the balance sheet by showing the grant as a deduction
from the gross value of the assets concerned in arriving at their book
value.
.
2.Where the grant related to a specific fixed asset equals the whole,
or virtually the whole, of the cost of the asset, the asset should be shown
in the balance sheet at a nominal value.
.
3.Alternatively, government grants
related to depreciable fixed assets may be treated as deferred income
which should be recognised in the profit and loss statement on a
systematic and rational basis over the useful life of the asset, i.e., such
grants should be allocated to income over the periods and in the
proportions in which depreciation on those assets is charged.
.
1. Government grants related to specific fixed assets should be
presented in the balance sheet by showing the grant as a deduction
from the gross value of the assets concerned in arriving at their book
value.
.
2.Where the grant related to a specific fixed asset equals the whole,
or virtually the whole, of the cost of the asset, the asset should be shown
in the balance sheet at a nominal value.
.
3.Alternatively, government grants
related to depreciable fixed assets may be treated as deferred income
which should be recognised in the profit and loss statement on a
systematic and rational basis over the useful life of the asset, i.e., such
grants should be allocated to income over the periods and in the
proportions in which depreciation on those assets is charged.
.
08 December 2012
Many Many Thanks To You.But you have more information please send to me.
Thanks & regards
Vijay.
Thanks & regards
Vijay.
CA Ayush Agarwal
(Expert)
08 December 2012
For Complete Detail, You Read AS-12 Goverment Grant. Para for Depreciable Asset
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