[GNC] Business Feature Question

[David Cousens]

David,

Depending on who the grant is from and conditions of the grant and local
legislation, it may be treated either as capital or income.

Are you required to invoice the granting agency before they pay the grant
money to you? 

If not, then there is no real need to use the business features and A/R
process. You can simply handle this as a debit to your bank account and a
credit to an appropriate income account. However if using the business
features is convenient then there is no problem using them. You could raise
the invoice when advised the grant has been awarded with the payment
recorded when the money is received even if you do not actually post the
invoice.

If you are accounting on an accrual basis and not a cash basis, you may want
to consult your accountant about when the grant money is considered to be
earned:
   when the grant is awarded;
   when you are paid the money or 
   when you fulfill the obligations of the grant. 

This could have implications for taxation for instance and will depend on
legislation in your jurisdiction.

David Cousens



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David Cousens
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