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Under Capital grant, there are two ways of accounting it
1 ) Reduce the grant from the cost…….
2 ) Recognize initially as deferred income and then transfer over proportion.Which method to be used plus wats deferred income?
Under 2nd option when transferring the % is always the depreciation %?“Which method to be used plus wats deferred income?” – whichever method the company adopts.
Deferred income is the place to credit the grant (Dr Cash) instead of crediting it to the asset (option 1)
“Under 2nd option when transferring the % is always the depreciation %?” – not necessarily, but probably – over the remaining useful life of the affected asset
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