Booking of capital subsidy, Accounting - Auditing

[Velayutham Panchatcharam]

Dear Members,

We have received capital subsidy from government towards fulfilment of investment as per MOU. My question is whether this subsidy is booking under other income or capital reserve?

Looking for your reply at the earliest.

Best regards

Panchatcharam V

Posts / Replies

[CS SANJAY MALHOTRA]

Same is to be accounted as CAPITAL RECEIPT and to be shown in Capital Reserve. Had the same been of Revenue Nature such as Sales Tax Subsidy ..........it would have been accounted as Revenue receipt.

[MARIAPPAN GOVINDARAJAN]

I agree with the views of CS Sanjay Malhotra.