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Hello,
I have a question regarding government grants which is a bit different from the usual.
If an entity receives grants but not in the form of cash, particularly a land and a building from a related party (granted with no cash out). What is the accounting treatment.
As per my understanding, FA should be debited ad deferred grants credited, and the deferred grants are annually amortized.
Thanks,
That’s what I would do too – I can’t think of any sensible alternative
This is from IAS 20:
“Non-monetary grants, such as land or other resources, are usually accounted for at fair value, although recording both the asset and the grant at a nominal amount is also permitted. [IAS 20.23]”
OK?
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