How to account for Sales and use
How to account for Sales and use tax rebate received from the city
Answers
Not sure about the details of the incentive program and the timing of receipt but It is a "rebate". At face value, contra Sales and Tax Use Expense. In the off chance that the money is given upfront, then Deferred Income to be amortized to reduce Sales and Tax Use Expense until initial amount goes to zero.
Revenues are "inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity’s ongoing major or central
There's not a lot of US GAAP guidance relating to government grants and subsidies, but the issue has been addressed by the AICPA and the IASB (which is considered nonauthoritative guidance for US GAAP). Bottom line is that you should deduct the rebate from the related expense. That is, deduct it from the office relocation expenses (moving costs, etc.). If the rebate exceeds the direct relocation costs, or continues for some period, deduct it against the office lease costs.
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Thanks. I read through the IAS 20
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