[et_pb_section admin_label=”Header – All Pages” global_module=”1221″ transparent_background=”off” background_color=”#1e73be” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” gutter_width=”3″ custom_padding=”||0px|”][et_pb_row global_parent=”1221″ admin_label=”row”][et_pb_column type=”4_4″][et_pb_post_title global_parent=”1221″ admin_label=”Post Title” title=”on” meta=”off” author=”on” date=”on” categories=”on” comments=”on” featured_image=”off” featured_placement=”below” parallax_effect=”on” parallax_method=”on” text_orientation=”left” text_color=”light” text_background=”off” text_bg_color=”rgba(255,255,255,0.9)” module_bg_color=”rgba(255,255,255,0)” title_all_caps=”off” meta_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [/et_pb_post_title][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” global_module=”1228″ fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” custom_padding=”0px||0px|” padding_mobile=”on” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” gutter_width=”3″][et_pb_row global_parent=”1228″ admin_label=”Row” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” gutter_width=”3″ custom_padding=”0px||0px|” padding_mobile=”off” allow_player_pause=”off” parallax=”off” parallax_method=”off” make_equal=”off” parallax_1=”off” parallax_method_1=”off” column_padding_mobile=”on”][et_pb_column type=”4_4″][et_pb_text global_parent=”1228″ admin_label=”Text” background_layout=”light” text_orientation=”left” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”]
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” fullwidth=”off” specialty=”off”][et_pb_row admin_label=”Row”][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”center” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [button link=”http://www.frs102.com/members/premium-toolkit/” type=”big” color=”red”] Return to Main Index[/button] [/et_pb_text][/et_pb_column][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”center” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [button link=”https://uk.frs102.com/members/premium-toolkit/section-24/” type=”big” color=”red”] Return to Section 24 Home[/button] [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” gutter_width=”3″][et_pb_row admin_label=”Row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Main Body Text” background_layout=”light” text_orientation=”justified” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”]Section 24 – Example 1 – Example Using an Accruals and Performance Model
OmniPro comment
See below illustration of the disclosure requirements. Company law in addition to Section 24, does not allow the grant to be netted against the cost of the asset. Usually deferred grants would be shown separately on the fact of the balance sheet or included within the ‘provisions and liabilities’ line in the balance sheet.
Examples 19 & 20: Extract from an accounting policy note in the financial statements
EXAMPLE USING AN ACCRUALS MODEL
Government grants
Government grants are recognised at their fair value when it is reasonable to expect that the grants will be received and all related conditions will be met.
Grants that relate to specific capital expenditure are treated as deferred income which is then credited to the profit and loss account over the related asset’s useful (i.e. an accruals basis). Revenue grants are credited to the profit and loss account when receivable so as to match them with the expenditure to which they relate. Government grants received are included in ‘other income’ in profit or loss
EXAMPLE USING THE PERFORMANCE MODEL
Government grants are recognised when it is reasonable to expect that the grants will be received and all related conditions will be met.
Grants that relate to specific capital expenditure are treated as deferred income which is then credited to the profit and loss account once the performance conditions of the grant have been met. Revenue grants are credited to the profit and loss account when the performance conditions for the grant are fulfilled.
Extract from the notes to the financial statements – note on government grants (capital grant)
- DEFERRED INCOME – GOVERNMENT GRANTS
| 2015 | 2015 | |
| €’000 | €’000 | |
| Capital grants received and receivable | ||
| At beginning of year | XXX | XXX |
| Received during the year (see (i) below) | XXX | XXX |
| At end of year | XXX | XXX |
| Capital grants amortised | ||
| At beginning of year | XX | XXX |
| Amortised during the year | XX | XXX |
| At end of year | XXX | XXX |
| Net book value | XXX | XXX |
Under agreements between the Company and XXXX Development Authority dated on various dates between XX/XX and XXX, the Company has a contingent liability to repay in whole or in part grants received amounting to €XXX if certain circumstances set out in those agreements occur within five years of receipt of the final instalment of each grant. The amounts received under these agreements amounted to €XXXXX.
During the year the Company received a grant of €XXXXX towards the construction of its factory.
Example 21: Extract from the notes to the financial statements – note disclosing contingent liabilities
Contingent liabilities
Under an agreement between the company and the Industrial Development Agency, the company has received certain revenue grants amounting to €XXXX which may be revoked, cancelled or abated in certain circumstances.
Example 22: Extract from the notes to the financial statements – note disclosing grant amortisation and government grants received
- THE PROFIT BEFORE TAXATION WAS ARRIVED AT AFTER CHARGING
| 2015 | 2014 | ||
| € | € | ||
| Depreciation | 149,999 | 170,037 | |
| Government grants – training grant | (212,000) | (225,600) | |
| Grant amortisation | (1000) | (1,000) | |
| Research and development tax credit | 13,000 | 13,000 |
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