How to categorize a payment from a category

[Manager_User]

Here is some answers to a similar question as yours:

Categorizing Covid financial support

Subsidies and grants are income to the organization as @lubos said. Specifically they should be classified as “Other income” so they aren’t confused with revenues. In cases where the grant or subsidy is conditional, and where such condition will not be met in the same period you received the money; the grant or subsidy should be kept under liabilities until the conditions are met. Only then would the grant or subsidy be transferred to income. The resource you have linked only instructs the be…

Categorizing Covid financial support

As long as you and your accountant remember how to treat it in your annual tax return, it doesn’t matter. A clean way Imo is create a total in your COA at the bottom of the profit & loss side labelled “Net taxable income” Below that create an income account “Tax free income” and a expense account “Not tax deductible” Put your Job keeper in the “Tax free income” account

Categorizing Covid financial support

Mmmm, but your equity is incorrect this way. Also such grants are supposed to cover costs and expenses, how do you account for these if you do not register it as income? The answer provided was clear, you need to treat it as non-taxable income in P&L, Grant Income should be listed in P&L as income but you exclude it from taxation, you can then trace expenses and costs against such grant.