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I know this is very silly question but I just wanted to confirm if the logic I have assumed for amortisaton in this case being an income is correct . Could u please clarify the doubt ??
Thanks in advance
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).
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
I believe that we’ve answered this question on the forum for you.
1. Can we deduct government grabt from PPE?
2. How about Grant reksted to expect expenses? There are still 2 treatment there?
1. Yes the grant can be deducted but it is a treatment that is rarely used.
2. For grants related to expenses then we have the revenue method only.
200k per annum 6:32
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