Under Capital grant, there are two ways of accounting it
1 ) Reduce the grant from the cost.......
2 ) Recognize initially as deferred income and then transfer over proportion.
Which method to be used plus wats deferred income?
Under 2nd option when transferring the % is always the depreciation %?
Ask the Tutor ACCA FR
Grant
"Which method to be used plus wats deferred income?" - whichever method the company adopts.
Deferred income is the place to credit the grant (Dr Cash) instead of crediting it to the asset (option 1)
"Under 2nd option when transferring the % is always the depreciation %?" - not necessarily, but probably - over the remaining useful life of the affected asset
thnk U :)
How do u wat the method the company uses?
You ask the company! Or, in the exam, you follow what the examiner tells you
Sign in to reply to this topic.