Capital grants reduce asset cost for depreciation, while book-profit adjustments require a specified statutory clause.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Capital grants, subsidies and consumer contributions reduce the actual cost or written-down value of relevant assets for depreciation. Where not directly attributable to a particular asset, they require allocation among the affected assets at their respective depreciation rates. Book-profit adjustments for such grants, including subsidy grants received in advance, require an identified clause in the Explanation to section 115JB(2); treatment under normal tax provisions alone is insufficient. Borrowing-cost capitalisation depends on direct attribution to qualifying capital projects and cannot rest on an unsupported assumed historical rate or unsubstantiated accounting-method change. Assistance for beneficiary-owned solar systems is revenue i.........