Page 219 - F1 Integrated Workbook STUDENT 2018

IAS 200 Government Grrants andd IAS 40 Investment Propperties

Exxampple 1

An entity opens a new ffactory andd receives a governmment grant of $15,0000 in
respect of cappital equipment costing $100,000. It depreciates all plant and
machinery at 20% pa sttraight-line.

Shoow the stattement of pprofit or losss and stattement of ffinancial poosition
extrracts in resspect of the grant in tthe first yeear under bboth methoods.

Sollution

Method 1: Deeduct fromm asset

Staatement of profit or loss extract
$
Deppreciation (below) (17,000)

Staatement of financial pposition exttract
$
Nonn-current aassets:
Plaant & machhinery
(1000,000 – 155,000) 885,000
Acccumulated depreciation
(855,000 × 20%%) (17,000)
–––––
6 68,000

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