The corporation received a $5,000 grant from their Municipality.
No conditions other than to be used for the intended purpose - supplies and a nominal amount for equipment ($1,000.00).
Does anyone see an issue with this grant being entered in Other Revenue GIFI 8230 (*other revenue) or GIFI 8242 (Subsidies and grants)?
The way I see it is there are two options
Recognize the $5,000 as Other Revenue
Alternative treatment - for the portion of the grant going to equipment - decrease the cost base by $1,000.00 (On the Additions and Dispositions workchart enter $1,000 under government assistance to lower the depreciable amount by $1,000)
Therefore $4,000 to Other Revenue and decrease cost base of equipment $1,000.00
Any thoughts on this?