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Sir, here is a bit headache.
A company receives a government grant of $500000 on 1 April 20×7 to facilitate purchase on the same day of an asset which costs 750000. The asset has a five year useful life and depriciafed on a 30% reducing balance.
Company is to account for all grants received as deferred income.
What amount if income will he recognised in respect of of the grant in the year to 31 march?
Please respond for the benefit of many
From my understanding you should only recognise 100k for year to 31st march (500/5 = 100) the remaining 400 should be recognised in the SOFP under government grant (100k as current liability and 300 as Non- current liability)