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Government grants (IAS 20) – ACCA (SBR) lectures

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  1. Hi,

    I was wondering that if we receive cash in government grants then will it be also shown in statement of Cash flows? If yes, then is there a chance that government grants could be squeezed into Question 1 of group cash flows in the exam?

  2. How are you? If we receive the grant 2 months after purchasing the PPE in June (reporting date is end of December), do we spread the grant on monthly basis or on yearly basis?
    Company’s policy is to charge full year depreciation in year of purchase.

    • Hi,

      Yes, you are correct with regards to it being income through profit or loss. It is a bit confusing as we are only really used to hearing amortisation as being an expense in relation to the reduction of the value of an intangible.

      Essentially amortisation is referring to the reduction of a balance, and here the deferred grant income is being reduce (an asset).

      Thanks

  5. Hi,

    could you tell me what happens if the government awards a company an asset, such as a licence for 10 years?

    would you recognize a liability as differed income and move to the profit and loss over the life?

    Also what happens if a few years down the line this asset gets revoked? do you just remove the liability?

    thanks in advance

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