Grant accounting

This query is : Resolved

nidhi jain (Querist)
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14 December 2013 Can grant received from govt. be shown under the head other non current liabilities in the balance sheet?

CA Sanjeev Kumar

CA Sanjeev Kumar (Expert)
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14 December 2013 its possible if its for more than 1 year

P V Ram

P V Ram (Expert)
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14 December 2013 There are 2 methods for accounting grants recd.

A. Amortising the grant during the life of the asset for which such grant was recd. by crediting p&l a/c. every year. In this case, bal. amt. it is to be disclosed below reserves and above loans in balance sheet.

B. Setoff the grant amount to the value of the asset and chatge depn. on the reduced value of the asset as per applicable rate.

Note: In case grant is recd. against a non depreciable asset, then it is to be treated as capital reserve.

Thanks!

SANYAM ARORA

SANYAM ARORA (Expert)
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15 December 2013 Agreed with Ram sir ....!!

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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15 December 2013 @ P.V.Ram Ji

Ref:- Clause A

Seems balance amount should be shown in 'reserves and surplus' as per revised schedule VI since an additional 'line item' in between 'reserves' and 'loans' can't be created.

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