As 12 - government grant

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 November 2012 My company has received some grant which is of revenue nature.
I want to show it as a deduction in P & L A/c in reporting the related expense.
But my expense is less then grant amount, say my expense is 100 but my grant is 120. So can i show in P&L A/c on expense side as
Expense 100
Grant -120
Net Expense -20
Is it possible to show on expense side the grant figure as negative.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

27 November 2012 If the revenue grant is related to that particular expense only then first it should be deducted from that expense only.
If the grant received is more than the expenses incurred then the balance should be shown under "indirect income"

CA. Subhash Dangi

CA. Subhash Dangi (Expert)

27 November 2012 As per prudent accounting practices, the amount of grant received and expenses related to grant should not be netted off.
Separate disclosure required by showing in appropriate heads for grant received and expenditure incurred in Profit and Loss account.

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