Grants - how to account for

Grants - how to account for

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We started a small company and got a small business startup grant.

Do we include it in sales?

Is it therefore taxable?

Thank you.

Paul

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By GrahamASA
03rd Dec 2008 22:05

Disclosure & Tax Treatment
1. No the grant shouldn't be disclosed under sales. It should be either disclosed as a line item under "other" income.

2. As for tax treatment, grants are normally not taxable so you would deduct it from taxable income in the tax computation and it would be a permanent difference for deferred tax calculation if you provide for deferred tax.

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