AS 12 — Non-Monetary Government Grants (Grants in Kind)

## Non-Monetary Government Grants (Grants Received In Kind)

Non-monetary grants are received as assets rather than cash — e.g., land, building, or machinery provided by the government.

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### Case 1: Asset Received at Concessional Cost (Below Market Price)

Government provides the asset below market value but still charges some amount.

Rule: Record the asset at the actual acquisition cost (amount actually paid).

Journal Entry:

```

Building A/c Dr [acquisition cost paid]

To Bank/CIB [acquisition cost paid]

```

Depreciation: Charged on the full acquisition cost paid.

> The market-price benefit (difference between market value and concessional price) is NOT separately recorded.

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### Case 2: Asset Received Free of Cost / at Nominal Value

Government provides the asset at ₹1 or completely free.

Rule: Record at nominal value (e.g., ₹1).

Journal Entry:

```

Building A/c Dr ₹1 (nominal)

To Govt Grant / Capital Reserve ₹1

```

Depreciation: Charged on ₹1 — effect is immaterial.

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### Key Comparison