Accounting for Grant Income FRS105

When is it possible to defer Revenue Grant Income using FRS105

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A client has received revenue grant income from several sources which has not been spent in its entirety by the end of the company's financial year - extending the YE is not an option.

Looking at FRS105 the company must use the accruals basis for the recognition of the income, for Government Grants, but these grants are not Government Grants as far as I have been able to ascertain.

The grant paperwork gives a deadline for expenditure and the money recieved must be spent within a certain area (ie it cannot be spent on whatever the company chooses) but there are no specific dates or items stipulated - so the money must be spent within a 12 month period on (for example) improving the website and social media presence but the company remains in control of how and when the money is spent.

Is there any basis for deferring some of the income to match when the expenditure hits the P&L?

Any thoughts / links gratefully received.


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By paul.benny
24th Nov 2022 11:34

I would suggest that the provisions relating to government grants apply equally to other grants.

On that basis, the provisions of para 19.7 not just permit, but require you to match income to expenditure.

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Replying to paul.benny:
By EllaB
24th Nov 2022 16:04

Thanks Paul.

I found an old thread on here that suggested that it would be dependent on the terms of the grant - seems not be any actual guidance - although section 19 does say it applies to Government Grants in bold type which makes me wonder if it is specifically for them and not other grants.

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