Amortisation

That is also like depreciation for intangible assets. 

Software is amortised

Machinery is depreciated

In grants business, there are two methods to accont for asset grants

1. Direct method- reduce the grant amount from asset and then depreciate

2. Indirect method- reduce the asset value by depreciating and then reduce the grant amount.

Both the ways, results are the same. However, you have to amortise the grant annually for both the processes.

eg. if grant amount is 60,000 and asset life is three years

then grant amount= twenty thousand

in cash flow statement it will be shown under investing activities

If the asset is purchased on loan, it will be classified as financing activity. As 3 doesn’t have this classification but IndAS doesnt as well. IAS 7 classifies it as both investment and financing. But since cash is involved, it’s into cash flow statement.

In IndAS and as, cash receipts from refund of loans and advances must be used to recognise.