TREATEMENT OF GOVT.GRANT

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Kindly guide regarding treatement of Govt Grant received for specific fixed assets(either depreciable or non depreciable) . if assets purchase in Year 2008 and grant is going to received after 3 year after fullfilling certain conditions, what will be treatement of the same?. if grant is chargable as an income, kindly specify in which year and under which section it will be chargable.

AI Summary

Clarification on Treatment of Government Grants for Fixed Assets under Accounting Standard 12, Recognized Upon Compliance Assurance. A query was raised regarding the treatment of a government grant received for specific fixed assets, purchased in 2008, with the grant to be received three years later after fulfilling certain conditions. The response clarified that a grant of a capital nature is recognized when there is reasonable assurance of compliance with the grant conditions and certainty of collection. For depreciable assets, the grant is either reduced from the asset's cost or treated as deferred revenue income, while for non-depreciable assets, it is credited to capital reserve. Further details can be found in Accounting Standard 12.