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How would I answer this question without having the useful life of the asset?
“America Co prepares its financial statement to 31 October each year. During the current year, America Co secured and received a government
grant totaling $720,000 to support the digital upskilling of its workforce. $120,000 of the grant relates to investment in new IT equipment and the
remainder is to support training across a two-year period from 1 April 20X5 to 31 March 20X7. The grant was received on 30 June 20X5. America Co
fully intends to comply with the conditions of the grant. It purchased the new IT equipment on 1 April 20X5 as required and commenced training
with immediate effect.What amount should be included in non-current liabilities of America Co at the year-end 31 October 20X5?”
Hi,
It is asking you to looknat how to treat the grant in relation to the upskilling of the workforce through the training, not.in relation to the purchase of the IT equipment.
You will need to use the deferred income method and then spread it over the two years we are providing the training for.
Thanks
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