Accounting standards
This query is : Resolved
Kruthika K M
(Querist)
19 October 2013
Is it allowable to treat Grant received in the nature of Promoter's contribution(promoter being government) as a borrowing in the books of accounts in order to classify the entity as a Level 1 enterprise ?
CMA Ramesh Krishnan
(Expert)
20 October 2013
As per AS-12, The Grant received from Government as capital(Promoter contribution) need to show under shareholders funds, not to treat as Borrowing, since it is not returnable
Kruthika K M
(Querist)
21 October 2013
But the grant is refundable as it doesn't fulfill the conditions....in that case can it be treated as a borrowing??
CMA Ramesh Krishnan
(Expert)
21 October 2013
Incase returnable it is not nature of Grant. It is not fulfil the condition of grant. it is nature of loan
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Kruthika K M
(Querist)
22 October 2013
Thanks a lot sir .
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