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capital subsidy

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16 December 2009 can capital subsidy received in respect of an asset in a year be deducted over the years from the cost of the asset?

please refer any case law if any?
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CA SURENDRA KUMAR RAKHECHA

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CA SURENDRA KUMAR RAKHECHA (Expert)
16 December 2009 Refer AS-12 Accounting for Government Grants.

If capital subsidy is received which is related to depreciable fixed assets (generally it is so); then either it can be fully deductible from the cost of the asset

or

Capital subsidy may be treated as deferred income. This income is taken on some rational basis i.e. proportioning it during the useful life of the asset. Hence you can take this option.

CA Rakhecha,Surat
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