On 1 June 2022, Tshenolo received written confirmation from a local government agency regarding a BWP1...

 

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● ● ● On 1 June 2022, Tshenolo received written confirmation from a local government agency regarding a BWP1 million grant for the purchase of a new office building. The grant becomes eligible for receipt on the same day Tshenolo transfers the BWP10 million purchase prices to the vendor. Tshenolo made a BWP10 million cash payment for its new office building on 1 October 2022, which is estimated to have a useful life of 50 years. The building was ready for use by 1 December 2022, and Tshenolo received the government grant on 1 January 2012. Page 7 of 8 a) Discuss how IAS 23 recommends this transaction should be recognized (4 marks) and use supporting Calculations of the possible accounting treatments of the above in the financial statements. (8 marks) ● ● ● On 1 June 2022, Tshenolo received written confirmation from a local government agency regarding a BWP1 million grant for the purchase of a new office building. The grant becomes eligible for receipt on the same day Tshenolo transfers the BWP10 million purchase prices to the vendor. Tshenolo made a BWP10 million cash payment for its new office building on 1 October 2022, which is estimated to have a useful life of 50 years. The building was ready for use by 1 December 2022, and Tshenolo received the government grant on 1 January 2012. Page 7 of 8 a) Discuss how IAS 23 recommends this transaction should be recognized (4 marks) and use supporting Calculations of the possible accounting treatments of the above in the financial statements. (8 marks) ● ● ● On 1 June 2022, Tshenolo received written confirmation from a local government agency regarding a BWP1 million grant for the purchase of a new office building. The grant becomes eligible for receipt on the same day Tshenolo transfers the BWP10 million purchase prices to the vendor. Tshenolo made a BWP10 million cash payment for its new office building on 1 October 2022, which is estimated to have a useful life of 50 years. The building was ready for use by 1 December 2022, and Tshenolo received the government grant on 1 January 2012. Page 7 of 8 a) Discuss how IAS 23 recommends this transaction should be recognized (4 marks) and use supporting Calculations of the possible accounting treatments of the above in the financial statements. (8 marks) ● ● ● On 1 June 2022, Tshenolo received written confirmation from a local government agency regarding a BWP1 million grant for the purchase of a new office building. The grant becomes eligible for receipt on the same day Tshenolo transfers the BWP10 million purchase prices to the vendor. Tshenolo made a BWP10 million cash payment for its new office building on 1 October 2022, which is estimated to have a useful life of 50 years. The building was ready for use by 1 December 2022, and Tshenolo received the government grant on 1 January 2012. Page 7 of 8 a) Discuss how IAS 23 recommends this transaction should be recognized (4 marks) and use supporting Calculations of the possible accounting treatments of the above in the financial statements. (8 marks)

Answer rating: 100% (QA)

Answer According to the information provided Tshenolo received a written confirmation for a BWP1 million grant on 1 June 2022 which is eligible for receipt once the BWP10 million purchase price for th... View the full answer