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Hi Mike
The answer of this question was $0.50 million. My assumption calculation:
$1,000,000/50jobs = $20,000/4yrs = $5,000. My answer was wrong, what went wrong and why. Kindly tell me what when wrong for my calculation. Thanks in advance.
Q2. A manufacturing entity receives a grant of $1 million when it creates 50 jobs. $0.5m is payable when the figure is reached with the remaining $0.5m payable at the end of 4 years should be 50 jobs still be in existence. There is reasonable assurance that the employment levels will be maintained when reached.
What is the deferred income balance at the end of the second year?
“with the remaining $0.5m payable at the end of 4 years should be 50 jobs still be in existence.”
There’s your answer!
Why are you deferring the whole grant for just one job?
$500,000 is correctly recognised immediately and the remainder is recognised at the end of 4 years if the jobs still exist
OK?
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