Regarding not for profit organisations

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SUPPOSE AN NPO RECEIVES AN ASSET AS A GRANT FROM A SOURCE.WHAT WILL BE THE ACCOUNTING JOURNAL ENTRY TO BE PROVIDED BY THE FIRM TO RECORD THIS?AND WHETHER DEPRECIATION IS TO BE PROVIDED ON SUCH ASSET?

Replies (2)

SOMEBODY PLEASE REPYL TO MY ABOVE QUERY.

In gerrnally govt grant is given to NGO for some specific purpose

some time if NGO is not able to fulfill some specific conditions

which attached to such grants then NGO have to return such grant to govt.

so jurnal entry will be

assets a/c................................................dr

               TO deferred  govt grant a/c

note:-grant should be credited to income over the periods

and as year passes depreciaation is  also provided on such assests

 

result :- Net effect will be NIL ie. amt credited (apportioned grant) in P&L

               and dr. (depreciation) in P&L will be same 

 

If there is no condition attached and assets are non- depreciable then

grant amount sould be show as Capital Reserve A/c.

 

 

 

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