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In regards to the government grant for the purchase of depreciable asset, understood that each year there would be a Debit to deferred income under liability and Credit to Grant income in the SPL.
With reference to the simple pro-forma of the SPLOCI (page 13 of the revision notes), where should this ‘Grant income’ sit under? I believe in practice, there should be an ‘Other Income’ line above Operating profit?
Thanks in advance!
I would take it to the same place where the depreciation on the asset would usually be charged. So if depreciation goes in CoS then the grant income is net-off in CoS too.