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Accounting entry
What should be the accounting entry for: Govt. Grant received for construction of Buildings when the construction work is done not by the receiver but by engaging other executing agency
Replies (2)
(1)Bank Dr.XXX
To Govt Grant XXX
(Being receipt of Govt grant accounted)
On amount being paid to the respective agency,the amount needs to be transferred for the purpose of construction work from the Govt grant and the amount needs to reduce from total grant ledger balance.This would suffice as this would give a clear understanding of the amounts expended using Govt grant as grants are to be used only in respect of the project for which the amount was availed by the Govt.I hope ur clear.
Regards
Treat as deferred Income and trf the balance to PL
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