Friday, July 14, 2017

ICDS 7 vs. AS 12

The corresponding AS to ICDS - 7 'Government Grants' is AS - 12 'Government Grants'

Point of Difference

AS - 12
ICDS - 7
Recognition of Grant

Mere receipt is not sufficient.
Recognition cannot be postponed beyond date of actual receipt.
Grants other than those covered by specific provisions
Revenue grant recognised a income or reduced from related expenses

Doesnt clarify whether it is restricted to revenue grants
Relatable to depreciable fixed assets

Reduction from fixed assets OR Recognised as deferred revenue by systematic credit to P&L Reduced from fixed assets
Relatable to non depreciable fixed assets

No conditions - credited as capital reserve
Conditions attatched - credited to P&L over period of incurring cost of meeting condition of grant
No conditions - Treated as income
Conditions attached - income over period over which cost of meeting conditions is incurred
Grant in the nature of promoters contribution
Credited to Capital Reserve.
Treated as shareholders fund.
No clarity
(recognisable as income)
Disclosure requirement No disclosure for unrecognised grants
Disclosure for unrecognised grants