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sir in this video weve seen that if a non depreciable asset is acquired and for the grant is given and ther eis no future condition is met then transfer it to capital reserve but if there is any future conditions to be met then name it as deferred gov. grant and charge it to p and l in proportion to the future expenses of that condition lets say the land is 1cr and grant is 30l and future condition to be done for 1 year and the cost would be 10l .so here there is a future condition and the asset is non depreciable since it is freehold land so we charge the grant according the proportion of the money incurred but here it is only 10l so do we transfer 20l to capital reserve and charge the 10l to p and l in proportion which is here at one shot since its only 1 year and we incurred the expense of 10l at that 1year Video Details ------------- P1 - Accounting Standards - CA Inter AS 12 #4. Grants for Specific Non-Depreciable Fixed Assets
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CA Suraj Lakhotia Admin
Yes. Correct.
ok sir thanks so simply if the grant is against a non depreciable asset or the asset is non specifiable since they gave it for a project then in both case we transfer it to capital reserve or if it is non depreciable asset or for non specific assets having future obligation to be met for the purpose of grant then we use deferred method for both and if it related to an depreciable asset then we can use reduced or deferred approach did i covered every scenario sir and correctly
Thread Starter
N.V Karthikeyanok sir thanks so simply if the grant is against a non depreciable asset or the asset is non specifiable since they gave it for a project then in both case we transfer it to capital reserve or if it is non depreciable asset or for non specific assets having future obligation to be met for the purpose of grant then we use deferred method for both and if it related to an depreciable asset then we can use reduced or deferred approach did i covered every scenario sir and correctly
Not against a specific asset - Capital Reserve Specific Asset - Reduce or trf to deferred income Non Depreciable - Reduce from cost or trf to reserve. If conditions to be met - use deferred approach. Please watch the revision lecture once.
CA Suraj Lakhotia Admin
Not against a specific asset - Capital Reserve Specific Asset - Reduce or trf to deferred income Non Depreciable - Reduce from cost or trf to reserve. If conditions to be met - use deferred approach. Please watch the revision lecture once.
sorry sir i didnt stated for non depreciable asset that grant can also be reduced from the asset but rest i stated the same things you stated sir. thanks sir my doubt is clarified
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