Dear Members,
We have received capital subsidy from government towards fulfilment of investment as per MOU. My question is whether this subsidy is booking under other income or capital reserve?
Looking for your reply at the earliest.
Best regards
Panchatcharam V
Capital Subsidy Accounting: Record as Capital Reserve, Not Other Income, Distinct from Revenue Nature Subsidies. A participant in a discussion forum inquired about the correct accounting treatment for a capital subsidy received from the government, questioning whether it should be recorded as other income or capital reserve. Two responders provided guidance. The first response clarified that the subsidy should be accounted as a capital receipt and shown in the capital reserve, distinguishing it from revenue nature subsidies like sales tax subsidies, which are treated as revenue receipts. The second responder concurred with this view. (AI Summary)
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