As 12
This query is : Open
Querist : Anonymous
Querist :
Anonymous
(Querist)
21 November 2011
I have a query in AS 12. Government Grants
A Co. have Claimed exemption from Entertainment Tax for a period of 5 years. As per exemption notification Company can collect entertainment tax from the puble to the extent of Rs. 15 crore ( Cost of Multiplex theatre) by selling Movie tickets. i.e.
Ticket - Ts. 75
Entertainment tax - 25
Total Amount to be paid by a person - Rs. 100/-.
Company under the exemption notification is not required to deposit Rs. 25 with Government Authorities. At present company is taking Rs. 25 to its Profit & Loss Account.
My query is, Why Company is not deducting Rs. 25 from the cost of Multiplex theatre by assuming Rs. 25 as Government Grant. ..???
Is it right that comapny is crediting the entire amount to its Profit & Loss on receipt basis.
A Co. have Claimed exemption from Entertainment Tax for a period of 5 years. As per exemption notification Company can collect entertainment tax from the puble to the extent of Rs. 15 crore ( Cost of Multiplex theatre) by selling Movie tickets. i.e.
Ticket - Ts. 75
Entertainment tax - 25
Total Amount to be paid by a person - Rs. 100/-.
Company under the exemption notification is not required to deposit Rs. 25 with Government Authorities. At present company is taking Rs. 25 to its Profit & Loss Account.
My query is, Why Company is not deducting Rs. 25 from the cost of Multiplex theatre by assuming Rs. 25 as Government Grant. ..???
Is it right that comapny is crediting the entire amount to its Profit & Loss on receipt basis.
22 November 2011
MY opinion accounting treatment of the company is proper, because As.12 does not deal with government assistance, and AS.9 comes in to play, revenue recognition certain here in receipt basis..
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