Grant payments paid in arrears...
Ltd co client is receiving grant funds from a private Foundation in respect of eco project work. The grant payments are made (in arrears) after my client submits an invoice quoting an estimate of the labour and material costs of the work they've done. My questions are:
1. Is it ok to report the grant funding on a separate line in the P&L account instead of splitting out to offset against the original item cost? Normally I would split out, but the line item detail is vast (lots of components) and would take days to work out. If so, under what heading would you report it?
2. The last grant payment was received in January'12 for costs incurred by the Ltd in Oct-Dec 2011. I need to recognise this grant payment as at the BS date of 31.12.11 but am not certain under which heading. Is it correct to report under Debtors>accrued income? I am reporting under FRSSE.
Thanks for your help