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Sir plz tell me what is accounting treatment in case of repayment of Government grant if condition are breached?
Debit deferred income, credit cash? That’s if it’s an asset based grant and we have credited a deferred income account for the amount of the grant still to be earned in future years.
If we have on original receipt of the grant debited cash and credited the relevant asset, then on repayment we need to debit the asset and credit cash
Of course, in the latter situation above, it will mean that we have under-provided depreciation on this asset so a revision to an accounting estimate will be needed to bring the accumulated depreciation to the appropriate level
OK?
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