Words and Phrases - "surplus"

The taxpayer received government grants which were deducted in the capital asset amount shown on its balance sheet. However, a note to the financial statements showed the cost of the capital assets and the deduction therefrom for the grants net of amortization.

In finding that the grant amounts should be included in capital under s. 181.2(3)(a), the Directorate stated:

[T]he net amount of … government grants, which is not a loan or advance, constitutes funds that the government has injected into the taxpayer. Since the government did not receive capital stock in return for that injection of money and since such grants are not contributed surplus, we are of the view that it is other surplus within the meaning of the expression “any other surpluses” in paragraph 181.2(3)(a).