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Ask the Tutor ACCA SBR

IAS 20

AAutumn7y ago
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
P2-D2P2-D2Tutor7y ago#1
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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