Comparison Chart of ICDS-VII, AS-12 & IndAS-20 - Income Tax - Ready Reckoner - Income Tax

Topic ICDS Indian GAAP Ind AS Government Grants ICDS VII relating to government grants AS 12 Accounting for Government Grants Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance Government assistance Similar to Indian GAAP Does not deal with disclosure of government assistance other than in the form of government grants. Deals with both government grants and disclosure of government assistance. General Recognition Principle Government grants should not be recognised until there is reasonable assurance that (i) the entity shall comply with the conditions attached to them, and (ii) the grants shall be received. However, recognition of Government grant shall not be postponed beyond the date of actual receipt. Government grants available to the enterprise are considered for inclusion in accounts: (i) where there is reasonable assurance that the enterprise will comply with the conditions attached to them; and (ii) where such benefits have been earned by the enterprise and it is reasonably certain that the ultimate collection will be made. Mere receipt of a grant is not necessarily a conclusive evidence that conditions attaching to the grant have been or will be fulfilled. Similar to Indian GAAP. Refund of grant The amount refundable in respect of a Government grant related to a fixed asset or assets shall be recorded by increasing the actual cost or written down value of block of assets by the amount refundable. Where the actual cost of the asset is increased, depreciation on the revised actual cost or written down value shall be provided prospectively at the prescribed rate. The amount refundable in respect of a government grant related to a specific fixed asset is recorded by increasing the book value of the asset or by reducing the capital reserve or the deferred income balance, as appropriate, by the amount refundable. In the first alternative, i.e., where the book value of the asset is increased, depreciation on the revised book value is provided prospectively over the residual useful life of the asset. Repayment of a grant related to a fixed asset shall be recognised by reducing the deferred income balance by the amount repayable. Refund of grant other than those relating to fixed assets The amount refundable in respect of other government grants should be applied first against any unamortised deferred credit remaining in respect of the Government grant. To the extent that the amount refundable exceeds any such deferred credit, or where no deferred credit exists, the amount should be charged to profit and loss statement. The amount refundable in respect of a government grant related to revenue is applied first against any unamortised deferred credit remaining in respect of the grant. To the extent that the amount refundable exceeds any such deferred credit, or where no deferred credit exists, the amount is charged immediately to profit and loss statement. Where a grant which is in the nature of promoters contribution becomes refundable, in part or in full, to the government on non-fulfillment of some specified conditions, the relevant amount recoverable by the government is reduced from the capital reserve. Repayment of a grant related to income shall be applied first against any unamortised deferred credit recognised in respect of the grant. To the extent that the repayment exceeds any such deferred credit, or when no deferred credit exists, the repayment shall be recognised immediately in profit or loss. Repayment of a grant related to an asset (other than a fixed asset) shall be recognised by reducing the deferred income balance by the amount repayable.