Page 218 - F1 Integrated Workbook STUDENT 2018

Chapter 13

1.5 Capital Grants

IAS 20 permits two treatments.

 Write off the grant against cost of the non-current asset and
depreciate the reduced cost.

 Treat the grant as a deferred credit and transfer a portion to
other income each year, so offsetting the higher depreciation
charge on the original cost.

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