Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Derringo Co OTQ case BPP practice kit (for exams up to june 2021) – q. 141
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- April 23, 2023 at 1:45 pm #683394radeksadowskiParticipant
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question says clearly that Derringdo has accounting policy for grants to be treated as deferred income and releasing them as income. I dont fully understand why the answer is including the grant as part of the operating expense (depreciation). Question 141 asks what is the net amount that will be charged to operating expenses in respect of the server and looking at the answer in BPP kit it seems like we should net off server depreciation with grant release for the period. do You think it is correct?
thx in advance
EDIT: Im leaving my question here in case someone will face similar confusion.
However, I have found out that income related grant can be recognized as Other Income OR ALTERNATIVELY deducted from the associated expense. I’m assuming that in case of Asset related grants we can also deduct a grant release from associated expense (depr charge in this case)
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