- This topic has 3 replies, 2 voices, and was last updated 14 years ago by
.
- Posts
Hi I would like to know how do we really treat Government Grants in Cash Flow. I was tld by my Lectuer that we do not include it in the Statement of Cash Flow rather use it when calculating PPE figure , However I have stumble acorss a question from BPP that included Grant in the cash flow.. So now I am confused… Please advised .
Hi – the cash flow reflects movements of CASH for the year. To calculate such movement for the Statement of Cash Flows you need to determine the balances brought forward re GGs, see how much has been recognised in this year’s Statement of Income, compare with the GG balances carried forward and that should give you a figure for GGs actually received this year.
You need also to be careful when calculating this year’s expenditure on TNCA because a question may say that a grant has been received and deducted from the cost of the relevant asset. That suggests a larger amount has been spent acquiring the asset, but that larger amount has been compensated by the recipt of the GG.
Hope that helps
- You must be logged in to reply to this topic.