In this article, we will explain about ICDS VI and its difference with respective Notified Accounting Standard.
ICDS VII deals with the accounting treatment of Government grants, subsidies, duty drawbacks, waiver, concessions, incentives, reimbursements, etc.
|Sl. No.||Basis||ICDS VII||AS 12|
|1.||Grants of the nature of Promoters’ contribution||ICDS VII does not provide for grants of the nature of promoters’ contribution||They are given with reference to the total investment and treated as capital reserve which can be neither distributed as dividend nor considered as deferred income|
|2.||Treatment of Grants||The grant should either be treated as revenue receipt or should be reduced from the cost of fixed assets||Capital approach or the income approach are applied to recognize the grant received|