An entity subject to IFRS received a $30,000 grant from the provincial government to purchase research equipment
Question:
An entity subject to IFRS received a $30,000 grant from the provincial government to purchase research equipment January 1, 20x3. The grant stated that the entity needed to submit its research findings to the Department of Health twice per year - June 30th and December 31st - for three years. If at any time they did not meet this requirement, the full amount of the grant needed to be repaid. It is December 31, 20x4 and in 20x3, the grant has been accounted for accurately and correctly. All reports have been submitted up to June 30th, 20x4. However, in November 20x4 the research team was dealt a devastating blow when a rival company made a breakthrough, making the research of this entity worthless. Dejected, the entire team quit and moved on to new research. No report was generated before they left. No entries have been made for 20x4 relating to this grant. This is considered a change in accounting estimate
Please provide the adjusting entry needed based on IFRS standard
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay