Page 8 - PowerPoint Presentation
P. 8
GOVERNMENT GRANTS AND GOVERNMENT ASSISTANCE
Asset-based grants
• The pre-requisite to account for a grant as an asset-
based grant is that an entity qualifying for it should
purchase, construct or acquire non-current assets.
• The receipt of an asset-based grant can be accounted
for in one of the following two ways:
• The grant is recognised as deferred income that is recognised
in profit or loss on a systematic basis over the useful life of
the asset, OR
• The grant is deducted in calculating the carrying amount of
the asset.
• The grant is then recognised in profit or loss over the life of a
depreciable asset as a reduced depreciation expense.
8
