S1: Government grant related to depreciable asset is usually recognized as income over the useful life of the asset and in proportion to the depreciation of the asset. S2: Government grant related to non-depreciable asset that requires fulfillment of certain conditions should be recognized as income immediately.

S1: Government grant related to depreciable asset is usually recognized as income over the useful life of the asset and in proportion to the depreciation of the asset. S2: Government grant related to non-depreciable asset that requires fulfillment of certain conditions should be recognized as income immediately.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 1MC: A donated fixed asset (from a governmental unit) for which the fair value has been determined should...

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Which of the following is true regarding government grant related to asset? *a. Depreciation is higher and net income lower if the grant is recorded as deferred revenueb. Depreciation is higher and net income lower if the grant is an adjustment to the assetc. Depreciation is higher if the grant is a deferred revenue and net income is not affectedd. Depreciation is higher if the grant is adjustment of the asset
In the case of grants related to an asset, which of these accounting treatments (balance sheet presentation) is prescribed by IAS 20? (a) Record the grant at a nominal value in the first year and write it off in the subsequent year. (b) Either set up the grant as deferred income or deduct it in arriving at the carrying amount of the asset. (c) Record the grant at fair value in the first year and take it to income in the subsequent year. (d) Take it to the income statement and disclose it as an extraordinary gain.
It is a type of grant which has a primary condition that an entity must comply which would be related to purchase, construct or otherwise acquire a long term asset?
Write the definition, recognition, measurement and derecognition if any provided for the following: Intangible assets Impairment of assets Investment property Agriculture Borrowing cost Government grant
Write the definition, recognition, measurement and derecognition for the following: Intangible assets Impairment of assets Investment property Agriculture Borrowing cost Government grant
Multiple choice question What is the rule regarding depreciation of federal capital assets classified as general property plant and equipment (General PP&E)? Select one: a. Federal agencies have the option of depreciating or not depreciating General PP&E. b. General PP&E is capitalized and depreciated only for federal business-type activities. c. All General PP&E is capitalized and depreciated. d. All General PP&E is expensed at the time of acquisition.
Which of the following is true about use of the modified approach? Choose the correct.a. It can be applied to all capital assets of a state or local government.b. It is used to adjust depreciation expense either up or down based on conditions for the period.c. It is required for infrastructure assets.d. For qualified assets, it eliminates the recording of depreciation.
What is the primary difference between revenue grants and capital grants in accounting for government grants? A. Revenue grants are recognized in the income statement immediately, while capital grants are recognized as deferred income. B. Revenue grants are used for long-term asset acquisition, while capital grants support day-to-day operating activities. C. Both revenue and capital grants are recognized in the income statement immediately. D. Capital grants are not accounted for in financial statements.
1. When an item of asset is transferred to and from the classification investment property, carried using the cost model, the measurement basis at the date of transfer is the a. original cost. b. fair value. c. carrying amount. d. recoverable amount.2. What could be a valid reason for transfers from investment property to property, plant and equipment? a. When there is a change in use b. based on the accountant's discretion c. When the entity adopts the fair value model d. when there is change in asset's life3. An entity has an investment property that is held for rental income. The entity uses the fair value model for reporting the investment property. Which of the following statement is true? a. changes in fair value are reported in profit or loss in the current period b. changes in fair value are reported as an extraordinary gain c. changes in fair value are reported in other comprehensive income for the period d. changes in fair value are…
During the construction period of these assets, the cost of the construction shall be charged to construction in progress account and the same shall be credited upon completion. Assets under this category are not subject to depreciation. a) Public infrastructures b) Other leasehold improvements c) Leasehold improvements- land d) Land improvements
Which of the following assets held by an enterprise would not qualify as investment in property as defined by PAS 40, Investment property? Land for sale in the ordinary course of business Land held for capital appreciation Land held for undetermined future use Building held to earn rentals Which of the following is included in the definition by PAS 20 of government grants?I. Transfer of resources to an entity in return for past or future compliance with certain conditions.II. Transactions with the government that cannot be distinguished from the normal trading transactions of the entity. II only I only Both I and II Neither I and II Which of the following would result in a Dr to AR? Sale of goods under " special order" "Special order is yet to be completed" Sale of goods classified as Trade Sale of goods under "Consignment" Sale with a right of repurchase
14 A government entity accounts for transfers to or from investment property at cost, no gain or loss shall arise from the transfer except when an asset is impaired. Group of answer choices True False