1).Grants
should not be recognised unless reasonably assured to be realised.
2). Grants towards
specific assets be presented as deduction from its gross value. Alternatively,
be
treated
as deferred income in Profit & Loss Account on rational basis over the
useful life
of
the asset when depreciable. For non-depreciable asset requiring fulfilment of any obligations,
it be credited to Profit & Loss Account during the concerned period to
fulfil obligations.
3). Balance
of deferred income be disclosed appropriately as to promoter’s contribution, be
credited to capital
reserves
and considered as shareholders’ funds
4).Grants
in the form of non monetary assets given at concessional rate be accounted at
their acquisition cost.
5).Asset
given free of cost be recorded at nominal value.
6).Grants
receivable as compensation of losses/expenses incurred be recognised and disclosed
in Profit & Loss
Account
in the year it is receivable and shown as extraordinary item if appropriately
read with AS-5.
7).Contingency
related to grant be treated in accordance with AS-4. Grants when become
refundable, be shown
as
extraordinary item read with AS-5.
8).Grants
related to revenue on becoming refundable be adjusted first against unamortised
deferred credit
balance
of the grant and then be charged to Profit & Loss Account.
9).Grants
against specific assets on becoming refundable be recorded by increasing the
value of the respective
assets
or by reducing Capital Reserve/Deferred Income balance of the grant.
10).Grant
to promoter’s contribution when refundable be reduced from the Capital Reserve.
11).Accounting
policy adopted for grants including method of presentation, extent of
recognition in financial
statements, at
concession/free of cost be disclosed.
No comments:
Post a Comment