Accounting Standard-12(Govt Grants)

Hi friends

               Im taking my  1st chance to explain Accounting Standard.-12 and i hope all u people encourage me:-)

Govt Grants are two types monetary and non monetary

Treatment for Monetary:

1)Capital in Nature

 Two Treatments either deduct from Gross value of the Asset(This is apply to both depreciable and non depreciable assets)                                                                             or

 Treat it as deferred income and recognised in P&L account over the life of the asset in proportion to depreciation charged on related asset(in case of deprecaible asset) and in case of non depreciable asset credit to capital reserve

2)If Revenue in nature:-Reduced from Expenditure or credit to P&L account

3)If Grant received to Promoters Contribution:Then credit to Capital Reserve.

Treatment of Non-Monetary

1)If  Received at concessional rate:-Then record that assse at acqusition rate

2)If Received at free of cost     :-then record at Nominal value(i.e.,either at 1 or 100,however it depends)

If u find any mistakes,I request u to bring to my notice