a) High-tech Ltd received a grant of $6m to purchase a machine with a cost of...

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a) High-tech Ltd received a grant of $6m to purchase a machine with a cost of $15m. The asset will be depreciated over 5 years. The company has decided to treat the grant using the deferred income method. b) High-tech Ltd received a grant of $5m on condition that it purchases its raw materials from an under-developed part of the country for a period of 5 years. The grant is intended to compensate High-tech Ltd for the following costs that are expected to incur over a period of 5 years: Year 1: $8m $5m $4m $2m $1m Year 2: Year 3: Year 4: Year 5* Requirement: How the above grants should be treated in the financial statements in accordance with IAS 20 "Accounting for Government Grants and Disclosure of Government Assistance during years 1-5? a) High-tech Ltd received a grant of $6m to purchase a machine with a cost of $15m. The asset will be depreciated over 5 years. The company has decided to treat the grant using the deferred income method. b) High-tech Ltd received a grant of $5m on condition that it purchases its raw materials from an under-developed part of the country for a period of 5 years. The grant is intended to compensate High-tech Ltd for the following costs that are expected to incur over a period of 5 years: Year 1: $8m $5m $4m $2m $1m Year 2: Year 3: Year 4: Year 5* Requirement: How the above grants should be treated in the financial statements in accordance with IAS 20 "Accounting for Government Grants and Disclosure of Government Assistance during years 1-5?

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For the first grant of 6m In accordance with IAS 20 the grant should be ... View the full answer