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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › govt grant
1. In case we use netting off method. Say the company pays 10000 for expenses and grant against it is 4000.
So when paying expenses Dr exps 10000 cr cash 10000
when received grant – Dr cash 4000 cr expense 4000 (no need of making deferred income)
and against such grant if we have to repay it back to govt.
then P/L account Dr 4000 Cr cash 4000
am i right sir
Hi,
Yes, that is correct as we cannot use deferred income for the repayment as there isn’t any. Although if we have received the cash as we have met the criteria, it is fairly unlikely that we would have to pay it back.
Thanks