Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie (Dec 2017)
SUBSIDIES - FISCAL AND ACCOUNTING TREATMENT
Abstract
In the actual context of the international economic and financial crises, the necesity for capital is deepening. Subsidies represents a form of financial assistance given by the government, representing a transfers of resources to an entity in return for past or future certain conditions. They exclude those forms of government assistance which can not be assigned reasonably to a specific value, and those transactions with government which can not be distinguished from normal business operations of the entity. Subsidies represent amounts received for free (non-refundable and non-interest bearing) from the government, government agencies and similar institutions at national and international level. They are intended to cover capital expenditures, price differences for certain products and commodities, or other lawful purposes, provided that the terms for which they were granted. Regardless of their destination, subsidies should not be recognized in the accounts by the time it is clear that the legal entity shall comply with the conditions for granting them and they will be received. This article constitutes a theoretical and practical approach to different categories of subsidies, emphasizing their role as financial aid, a financing solution at national and international level. This article proposes a theoretical approach of the main categories of subsidies and their particularities and their reflection in accounting. To capture their specific features, I will analyze, distinct, the two categories of aid, the accounting policies for recognizing subsidies related to assets and subsidies related to incomes and their fiscal treatment thereof.
