Deferred Income CIC

Posted by rjh1983 PM | on Mon, 21/05/2012 - 12:50  1141  1 comment | report

Good Morning Everybody,

I just need to be sure what I am doing is correct!!

I'm preparing accounts for a Community Interest Company (CIC) and the only receipt they have received during the year is a lottery grant for £10,000.

As at year end they had spent around £4,000 of it.

Am I right in saying that the remaining £6,000 must be debited to 'Grants Received' and credited to 'Deferred Income' on the balance sheet? This would be complying with standard 'SSAP 4'.

Just to clarify the grant is deemed to be a government grant and is not taxable.

Your thoughts on this would be most appreciated.

Thank You   

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James Hellyer's picture

Purpose

James Hellyer | Tue, 22/05/2012 - 17:29 | Permalink

What's the purpose of the grant? That should tell you whether it should be deferred against future project expenditure or taken straight to the profit & loss account.

Even if the grant is a government grant, it's still taxable either as revenue income or via deduction from the capital allowance value of the capital assets it financed.

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