Grant asset accounting

A/c entries 657 views 3 replies

Hi All,

Can anyone explain how account grant assets in company books can grantee claim depreciation on grant assets if yes procedure

 

Thanks

Shiva Kumar

Replies (3)

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


CCI Pro

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