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Just trying to get my head around something – if you purchased an asset and and another company reimbursed us for part of the cost (although we still retain ownership of the asset and have sole access to economic benefits etc), would we deduct the reimbursed cost from the purchase price of the asset before we start depreciating it? For example, say I bought a piece of equipment for £15k and we were then reimbursed for £5k, would we essentially capitalise both the expense and income to depreciate an asset of £10k? Or would the £5k be recognised immediately in the P/L as Other Income and we depreciate the asset at a cost of £15k?
The 5k received sounds like a reimbursement and so it would be net-off the cost of the asset.