Treatment for non-government grants
If an entity receives fixed assets as grants from an individual or business entity, what is the accounting treatment for this transaction against the backdrop of the grant not being a government grant, which is provided for under International Accounting Standard 20(IAS 20).
Should the value of the fixed assets received be credited to a grants account and the corresponding debit taken to fixed assets, with annual credits being made to the Income statement over the life of the fixed Asset (in otherwords no depreciatio being charged at all!!!!) such that the grant account would have been released in its entirety by the end of the estimated useful life of the Fixed Asset?
Also, what should be the amount that should be recognised as being the value of the asset given as grant- i.e. is it the market value subsisting at the date of the grant or otherwise?
Please provide me with the Reporting framework/standard (UK and/or International) for this type of transaction.
Thanks in anticipation of a swift reply.
- Share swap 204 4
- Career slump - advice and/or sympathy much appreciated 436 9
- Should I pass on my HMRC login 293 9
- I'm not sure if this is the correct forum but here goes 110 2
- Was I rude 243 11
- Entrepreneurs relief/ Company Secretary 116 2
- Director's minimum wage? 103 2
- Work in progress calculation 86 2
- Limited Company - Personal Bank Account 930 29
- Help with share restructuring 89 1
- HMRC Employers Diary 569 1
- Advice please on best way forward 555 7
- Recommendations for tax advice sole practitioner 573 9
- Invoice factoring 211 7
- old client has come out of the woodwork 344 2
- Scoot 395 7
- Is our client doing anything wrong? 509 3
- paye scheme very used 260 3
- Operating lease 145 4
- Gifting shares 130 1
- Skandia using wrong address 1,470
- Nil Rate Band Trust - index linked debt by way of charge over property 794
- Any views 720
- International interest certificate 434
- Stamp Duty on share for share exchange 406
- Sale of business 372
- Advertising services? 273
- NOVA 272
- IRIS Open Books problem 267
- farming-related R & D tax relief claims 183