USA How to Record an Asset Purchased with Subsidy

[allen chang]

Hello all,

My company purchased relatively expensive assets (warehouse scales) from Mettler Toledo, with a technology subsidy we received from UPS. The subsidy amount is $4000, and the total amount on our invoice is $4,500. Therefore, all we have to pay is only the $500 difference ($4500-$4000 = $500)

However, it is somewhat unclear on how to record this asset. If I make a purchase order at a price of $500, then it will underestimate these assets' true cost (value). aND when I try to make a purchase order at $4500 and create a separate debit memo (refund) of $4000, my system won't let me credit cash. (Even though crediting cash wouldn't have made sense anyway since the amount of money we paid is only $500)

How do I have to tackle this dilemma? My goal is to capitalize the asset at the accurate price, and at the same time, to make sure our transaction best reflect what actually happened. The accounting software we're using is Odoo.

Any advise will be appreciated. Please help me !

 

[kirby]

Most folks would just book at $500 and be done with it. But you have valid concerns on accuracy. For example if you fill out a business property tax return you should report the scales at $4,500 not $500. You can try booking the scales at full cost in the fixed asset system AND booking the subsidy too as a separate "asset" that will "depreciate" and offset the full cost asset. Some fixed assets will not allow the negative asset. If it gets too complex go back to booking at $500 and make a note to manually adjust property tax reports and be done with it.

 

[abdul.mannan.11]

Hi,

Make two transactions, one is for other income and add description the rebate income, then record the bill with $4500.00,
pay the bill using the amount of rebate income and the payment that you made.