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R0xy_music
August 6, 2023
Question

Accounting for govt R&D grants

  • August 6, 2023
  • 1 reply
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I have a client who received government grants used to cover R&D expenses. Should the full amount of the grant be accounted for as deferred income (balance sheet) when received, then both income and expense amounts run through P&L when the expense is actually incurred? Thanks.

1 reply

Rainflurry
Rainflurry
August 7, 2023

@R0xy_music 

 

From a tax perspective, R&D expensing/credits are complicated enough, but combined with a grant, you need the help of a GOOD CPA.  If you're looking to just get it entered, I suggest booking the full amount of the grant as other income (called Federal R&D Grant or something similar) and let your client's CPA make the adjusting entry.  Just my $.02. 

F
FBAbel
January 29, 2024

Quick add-on question, please. If our company received grant money, to enter it in QB, would it just be listed as Other Income and named the name of the government agency that gave the grant money?  Since there is nowhere in QB to place grant money per se, the only thing to do is list it as other income, correct? Thanks so much for any clarification and help.

Rainflurry
Rainflurry
January 30, 2024

@FBAbel 

 

Correct.  Classify it as other income.  

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