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IAS 20

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IAS 20

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by P2-D2.
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    Posts
  • April 25, 2019 at 7:43 am #514055
    Autumn
    Member
    • Topics: 3
    • Replies: 0
    • ☆

    Hi,

    could you tell me what happens if the government awards a company an asset, such as a licence for 10 years?

    would you recognize a liability as differed income and move to the profit and loss over the life?

    Also what happens if a few years down the line this asset gets revoked? do you just remove the liability?

    thanks in advance

    April 25, 2019 at 8:35 pm #514153
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    Yes, you would treat in the same way as you would with PPE.

    If it is then revoked then we would remove any remaining deferred income and then if there isn’t enough the excess would go through profit or loss.

    Thanks

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