Allocating a grant received for capital items as deferred income

Sharonjayne

We have received a grant towards capital goods, computers to be specific. They were perchased in July 2014 and I have already started depreciating them in sage. We will receive the grant towards them shortly (7months after puchase) and I believe as we are a Limited Company we are to spread the reciept as deferred income over the useful life of the computer (5 years). I don't know how to do this. I'm using sage.

Marti

HI
I think, once you receive the grant, Dr Bank, Cr Deferred Income (Bal sheet) and then Credit the profit and loss account against this deferred income account by instalments over the expected useful economic life of assets. You may have to set up nominal codes for these but I think the deferred income (Bal Sheet) could be around the 210x and the P&L Deferred Income around 490x. I know that this needs more input but I’m sure someone can help more with regards to the Nom Codes.

Sharonjayne

Thanks Marti. Its a start. Does this mean i have to remember to do a journal each month for the next 5 years. I previously used taz books2 and know you can set up journals to upload all in one go each month. I have never used such a facility in sage.

Sharonjayne

I have looked on the NET and figured a spreadsheet with monthly amounts will help. All I need now are the correct nominal accounts to post them and I'm all systems go. Its was also mentioned that you can set it up as a current asset and try to use the depreciation facility. It's like a reversal but as long as you get the nominal codes around the right way it will post automatically every month along with the depreciation. I like this idea.