Grant asset accounting

There are two methods for accounting for grants in relation to Fixed Assets as per AS-12.  One is deduct the value of gratn received from the cost of FA & calculate yearly depreciation on the balance amount.  Thus the grant wud be recognised in P&L in the form of reduced depreciation.

On tha other hand show the gratn received as liability on the B/S & tranfer the same to P&L every year in proprotion to depreciation available for the grant.

There are two methods for accounting for grants in relation to Fixed Assets as per AS-12.  One is deduct the value of gratn received from the cost of FA & calculate yearly depreciation on the balance amount.  Thus the grant wud be recognised in P&L in the form of reduced depreciation.

On tha other hand show the gratn received as liability on the B/S & tranfer the same to P&L every year in proprotion to depreciation available for the grant.

Originally posted by : Giridhar S Karandikar
	There are two methods for accounting for grants in relation to Fixed Assets as per AS-12.  One is deduct the value of gratn received from the cost of FA & calculate yearly depreciation on the balance amount.  Thus the grant wud be recognised in P&L in the form of reduced depreciation. On tha other hand show the gratn received as liability on the B/S & tranfer the same to P&L every year in proprotion to depreciation available for the grant.

Can you give me accounting entry for 1st method, please. I want to know journal entry for Depreciation in 1st method.

Regards,

Prachi srivastava