- This topic has 2 replies, 2 voices, and was last updated 6 years ago by
.
- Posts
Grant for capital,
If government directly give us cash,
DR CASH
CR DEFERRED INCOMEIf government give us the PPE,
DR PPE
CR DEFERRED INCOMEis that correct? i know that can offset as well, how it can be done?
DR CASH
CR PPEHi,
You tend not to find a government giving you the actual PPE, as they’d usually give you the cash and expect you to use it to buy the asset yourself, or you may even have bought the asset already. So we usually just:
DR Bank
CR Deferred incomeThe offsetting that you refer to is when instead of showing the deferred income balance on the SFP, we offset it against the PPE balance. This would then mean that when you receive the cash you would:
DR Bank
CR PPEThis the results in a lower PPE balance and lower depreciation, but is rarely done.
Thanks
- The topic ‘Government grant’ is closed to new replies.