Treatment of grant received from non gov. entity
This query is : Resolved
17 August 2012
Hi,
Is the grant received from non gov. treaty also treated as per AS 12. Pl. explain
Is the grant received from non gov. treaty also treated as per AS 12. Pl. explain
17 August 2012
Accounting standards are meant for the maintaining the standard in the accounting treatment. Even though the AS12 says some thing about Govt Grants... what is the harm in applying the same for non govt grants? The standards are for our helping us. AS12 is not at all hazardous or dangerous. Please use it.
17 August 2012
Sir, I appreciate your view. But I want to know whether it falls in the ambit of AS -12. Whether it is to be shown as disclosure? And if it is not, it gives the option to assessee to follow any approach of recognition of grant to his benefit. I want to take view as auditor and not as accountant.
18 August 2012
Yes, you are right. I would definitely like to NOTE such new approach. Please do not take it wrongly.... If it is really innovative, we can ask ICAI to adopt the same. Looking forward to have your new approach. amolshankar@gmail.com
19 August 2012
Sir,
It's not a new approach but I want to know whether the words "any other similar body whether local, national or international" includes NGO or not......Wht does it include????
And if it don't then any body can tamper with the presentation of the GRANT from NGO For eg..Even for revenue grant, Grant may be taken to the capital reserve so as to avoid its effect on the P&L....or the grant may be used to offset the accumulated losses of the organisation......Thus affecting the true and fair view...........
It's not a new approach but I want to know whether the words "any other similar body whether local, national or international" includes NGO or not......Wht does it include????
And if it don't then any body can tamper with the presentation of the GRANT from NGO For eg..Even for revenue grant, Grant may be taken to the capital reserve so as to avoid its effect on the P&L....or the grant may be used to offset the accumulated losses of the organisation......Thus affecting the true and fair view...........
20 August 2012
The accounting standard basically aims at the commercial use of GRANTS. Where normally , philanthropic purpose is side lined or kept away. Tampering is quite evident in many cases as you rightly pointed out. And that is the reason, utilisation audit is now a days sought for by the DONORS.
21 August 2012
Sir,
but what does the words " any other similar body whether local, national or international" include ?? If possible, pl give example of such bodies......
but what does the words " any other similar body whether local, national or international" include ?? If possible, pl give example of such bodies......
21 August 2012
Normally they mean to include the projects carried out by Govt of 2 or more nations. There are instances of World Bank aided / funded projects.
21 August 2012
Also Sir, in utilisation audit also, on what base the auditor can argue when there is no audit standard or law for NGO? NGO can say that "it is their accounting policy to do the same".....
21 August 2012
Please enumerate this in slight details... which NGO seeking such a stand of... which accounting standard... I think this itself raise our eyebrows for doubt.
21 August 2012
Sir, what I want to tell is that AS-12 does not include NGO. Now when there is no AS, there is no uniformity in accounting policies. So auditor can not force for any particlar policy and this again gives away the way for the tampering which we have discussed earlier...So how the utilistion audit can curb such type of tampering....
21 August 2012
The grants are of 2 types. 1. General 2. Specific purpose. In either case, the utilisation embarks upon whether or not the utilisation of the grant is done as per its purpose. This is irrespective of whether or not AS12 is followed.
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