Page 33 - FR Integrated Workbook 2018-19
P. 33

Tangible non-current assets










                   Example 3




                   Capital grant

                   On 1 April 20X3 an entity receives a government grant of $45,000 towards
                   machinery costing $300,000. It depreciates all plant and machinery at 20% pa
                   on a straight-line basis.


                   Show relevant extracts from the financial statements for the year ended
                   31 March 20X4 under the net and deferred credit methods in the
                   proforma below.

                                                                Net        Deferred
                                                                             credit
                                                                $000          $000
                   Statement of profit or loss

                   Depreciation

                   ((300 – 45 grant) × 20%)                      (51)
                   (300 × 20%)                                                  (60)


                   Grant income                                    –              9


                   Statement of financial position
                   Property plant & equipment

                   (300 – 45 grant – 51 dep’n)                   204
                   (300 – 60 dep’n)                                            240


                   Non-current liability: grant                    –            27

                   (3 years × 45 × 20%)


                   Current liability: grant                        –              9
                   (1 year × 45 × 20%)







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