Where the grants are received for assets which are outside the block of assets, then what is the treatment of such grants.

Manual - ICDS VII : Government Grants

Not being related to depreciable assets, these grants have, necessarily, to be recognized as incomes. However, para 6 of ICDS VII says that the recognition of income should be spread over the period during which the cost has been incurred for meeting obligations in relation to the assets. The prescription in this para dilutes the mandate of para 4 of ICDS VII that grants cannot be recognised as income beyond the year of receipt. In such circumstances, as the Act does not envisage a spread over beyond year of receipt, the prescription in para 6 of ICDS VII should yield to provisions of the Act. It is only when the grant is recognised because there is reasonable certainty of receipt, that the same may be recognised as income over the period of incurring costs in meeting the obligations in relation to non-depreciable assets.

Dated: 31-8-2017