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.
- Accounting for cash put into Ltd 33 1
- LTD home office - would HMRC seek to disallow 1,257 8
- RTI and corrections to payroll 1,233 13
- Accountancy practices - are you closed over Christmas or do you let your staff take it off? 972 29
- You know its over 368 4
- HMRC BACK AND FORTH FIGHT ON BTL PROPERTY ALLOWANCES 504 9
- How do you find shareholders of a Cyprus Company ? 243 13
- Valuing my fast-growing internet business for transfer of goodwill on incorporation 193 2
- HMRC won't let me set up online DD for PAYE 178 2
- What is the amount of dividends received as a shareholder that requires registration for self assessment? 281 3
- Cocaine anyone? 527 8
- Late Registration for VAT 497 13
- EIS/SEIS 156 1
- Amortisation of Goodwill 283 1
- TaxCalc Accounts production 432 5
- Depression - HMRC penalties case won because of this illness. 432 12
- Solicitors now, Accountants next 731 10
- How come if you claim benefits you are not entitled to you either have to pay a 50% penalty or are sent to court and either fined or sent to prison (sometimes suspended) and end up with a criminal record. 565 10
- ACCA - still making me laugh 601 4
- Personal pension 407 9
- Hive up 493
- Accounting referance change & deficient accounts. 462
- corporate hierarchy 444
- Advice - 276
- Anyone had HMRC refusing to act on EPS database glitch? 229
- WWOOFers 219
- Co. limited by Guarantee now closed 210
- Art Gallery - Splitting a property between business and personal use 206
- Tax liabilities in USA for warehoused products 185
- Mutual Trading - Exempt CT Income - Do I need clearance? 177