Accounting for cash grants

[jon80]

I am a sole trader accounting for my income and expenditure as a self employed person, in Malta. I provide software services, and, consider training costs to be part of the business expenses. However, the training costs are subsidized by a cash grant offered by a publicly funded institution, subject that I pass my exams.

For the sake of prudence I was planning to account the training costs invoiced as a liability in any case, because there is a possibility that I do not pass my exams and the institution has the right to claim back the grant given to me.

On the other hand I have already been awarded the grant, and, this means that strictly speaking my financial needs have been covered on a cash basis, although 7 months down the line, which means that I can charge accumulative bank interest as a financial expense relating to the grant itself.

What is your advice? Are you an accountant?

 

[rroessel]

Since keeping the training money is contingent upon you passing your exams, it seems like unearned revenue (a liability) to me in that you've been paid the money, but haven't performed the obligation of passing the exams to keep the money.

As far as the interest goes, hopefully someone out there will have an answer to that part; I do not.

I have a bachelor's of science in accounting and am getting back into it after not using it since I graduated college.