ACCA FR · Guided practice (Show me how)
Chapter 5: Non-current assets
Government grants: deferred income and netting off
Grants and depreciable assets. Tweddle bought an item of property, plant and equipment for $10 million and received a government grant of $2 million. The PPE has a useful life of 10 years and has no residual value. Tweddle has met the conditions attached to the grant.
Government grants. XRT acquired plant costing $3m on 1 January 20X3, funded in part by a government grant of $1m. The plant has a useful life of 10 years. XRT's year end is 31 December.
Work in $000 (for example, $3m is 3,000).
Example 7: the grant as deferred income
Calculate Tweddle's depreciation charge and grant income for each year of use.
Example 8: deferred income and the two methods
Calculate XRT's deferred grant income and its non-current portion at 31 December 20X3, and the carrying amount of its plant under each permitted presentation method.
Opening this exercise…