CIC client with a grant which stipulates holding a reserve
I have a CIC client which has been receiving grants. Each year I match income with expenditure and carry forward any un spent grant at year end to deferred income. This year they have a grant with a condition that they must hold six months running costs for rent a redundancy package etc. My client says this should not be taxable. Can I post the six months reserve to deferred income? Any advice would be gratefully received. Thank you.
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