As Grant II account

In this post commented on the different legacies, donations and grants that a company can receive as well as the accounting for operating subsidies.

Now is the turn of other grants, (remember that although the examples do them with subsidies, might as well do it with a donation or a legacy), capital grants, and as things start going with the principle the first case: Capital grants not repayable.

Before starting the recording we see some important theoretical issues that impact directly on your posting:

• Was booked in the accounts (130) Government grants or capital (132) Other grants, donations and legacies, as coming from government agencies or private.
• This is one of the most important capital grants are allocated each year to income [as revenue in the accounts (746) Grants, donations and bequests of capital transferred to profit or loss account or (747) Other subsidies, grants capital and bequests transferred to profit or loss] in proportion to the duration of assets that have been objects of the grant.

  That is, if for example the good purpose of the grant, which linearly amortized over 5 years, the grant also impute to income in 5 years, or if you amortize it by 20% annually, the grant also impute to results by that percentage each year.

• If the grant has been obtained for the acquisition of non-depreciable (land and natural resources), the grant is charged to income when the sale takes place or lower in the accounts of the good purpose of the grant
• The PGC for SMEs indicates that capital subsidies appear in Equity for its tax value.

  What does this mean?: This means that the subsidies, charging on a revenue account (Group 7), are taxed in the corporation tax, so to reflect their tax value we have to take that tax burden, using for that account (479) liabilities for taxable temporary differences, something that will be much clearer by example.

And after this brief introduction and that it is not too long a post, leave accounting for a non-refundable capital grant for the next post,

Be happy.

The accounting information of this post refers to the General Accounting Plan for Small and Medium Enterprises approved by Royal Decree 1.514/2007 of 16 November 2007 in Spain and apply from 1 January 2008.

If this is your first visit to the category of accounting entries of HelloWorld Blog I recommend reading this post (click here) where you will see the guidelines and how this type of post, and you can download if you want the general PGC PGC for small and medium enterprises as well as online consult.

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