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Morning Chris, I hope you are doing good. i had a question about govt grant, This topic is preety straight forward but i had a question.
“if we buy a depreciating asset with the grant , then we release the deferred income over the life of the asset and using the same methord.”So, To be true it sounds like doing a straight line, my question was if there is residual value for the depriciating asset, Would we ignore it or Just deal with it like in straightline ( cost-residual value / useful years ) , If a question had apppeared in front of my eyes, i would simply ignore the residual value ( cost / userful years ) but still wanted to confirm is that correct?
and the other bit was, Does the “Same methord” in the notes mean, the methord used for the class of asset ?
Thank you very much !!!
Hi,
I’m well, thank you. If you were given a residual value then you would then use it as part of the release of the grant received.
Using the same method is referring to the straight line and reducing balance method. If we depreciate straight line then we release the grant income straight line too.
Thanks
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