Ro aeons ue oes ‘Change in accounting estimate accounting extimate. Repayment of a grant related to Income First, debit un-amortized balance of deferred grant, and any excess is recognised in as expense in profit or loss. Debit Deferred grant Debit P&L (excess) Credit Bank A government grant that becomes repayable shall be accounted for as a change in Repayment of grant related to aes ‘Method 1: Deferred grant account Debit Deferred grant Debit P&L (excess depreciation) Credit Bank ‘Method 2: Deduct from cost of asset Debit Asset Debit Pal (excess depreciation) Credit Bank The cumulative additional depreciation that would have been recognised in profit or loss to date in the absence of the grant shall be recognised immediately in profit or loss.LSE GUNS KO CULL UL SLE LLL (RSENS SN ABC Kampus Answer: i Jan 21 Deferred grant 32 Dec 22 431 Dee 22 20 Jan 23 Pareieulare cazh Deferred grant Profie & lose Deferred grane Profit & lo: Deferred grant Profit & los. c Dabie Re, 41,500,000 300,000 300,000 300,000 ‘600,000 Gredie Re, 500,000 300,000 300,000 unting for Government Grants and Disclosure of Government, Jaa ee 28 tonovaine Example OL; Grane related to Income On 1 January 2021 Jam Limited (JL) received a cash grant of Rs. 1.5 million towards the cost of employing an blockchain analyst on a new project for a 5 years’ period The grant is repayable in full if the project Is not completed. The analyse was employed and the project commenced from the 1 January 2021. On 20th January 2023, the project was cancelled and the grant became repayable in full Required: Journal entries, eeeRo aeons ue oes campus ‘Answer: Deferred Grant Account areleulare PPE Cash Taam Deferred grant Depreciation [5007 5] PPE a Fbec 20 De ane TOOTS] a. Bi-pecBl Depreciation Repayment ed grant Pu (Dep) [100 Sx 2] Gash Fibec Wd Depreciation O07] PPE tJan-22 4,8 rao "28 noyaeve™ Example 02: Grane related co asset (Full repayment) On Ise January 2020, Deep Limited inewalled “a non-currene asset with a coset of Rs. 500,000 and received a grant Of Rs. 100,000 in relation eo that asset The asset is being depreciated on a straight-line basis over five years. Repayment: Grant was repaid on ise January 2022 in full on failing to meer the condition Required: Journal entries for the year 2020 to 2022 (under both methods) eeeLSE GUNS KO CULL UL SLE LLL Anzwer: Deduct from cost Date Pareieulars Rs.000 Rs. 000 TJan-20 PFE cash a PPE BI-Dee-Z0 Depreciation [S00-100)7 ST PPE FpbeeBi Depreciation SSCS PPE Repayment A-Jan-22 PPE PRL (Dep) [100 / 5 x 2) jation [240+60) 7 3) 100 Debit Credit 500 500 100 100 30 80 80 20, 60 40 100 700 unting for Government Grants and Disclosure of Government, ABC Kampus Jae =e: 28 tnnovaeve™ Example 03, Grant related to azset (Full repayment) On ize January 2020, Deep Limited cost of Re. 500,000 and received a grant Gf Re. 100,000 in relation to that azcee The aszet ic being depreciated on a straight-line basis ever five years Repayment: Grant was repaid on ise January 2022 in full on failing to meer the condition Required: Journal entries for the year 2020 to 2022 (under both methods) eeeRo aeons ue oes “Answer: Deferred Grant Account Pareles Tlan-20 FFE 300 cash a a Deferred grant Bi-pec20 Deprectation [5007 3) 700 PPE Fiwee-20_peterred grant (1007 5] 20 Pet PPE Bi-pecal_peferred grant 20 Pe Repayment L-Jan-22veferred grant s4 Pax (Dep) [90/ § x 2) 36 cash Depreciation [5007 3] 700 ‘000 Re, 000 100 100) 20 100. 20 90 100 2 Jaa ee 78 tonovaine Example 05 Grane relaved to asset (partial repayment) on 3 January 2020, Deep Limited incealled @ non-current asset with a cost Of Re. 500,000 and received a grant of Re. 100,000 in relation to that azzet. The asset is being depreciated on a straight- line basis over five years. Repayment: Grant of Rs. 90,000 was repaid on ist January 2022 on failing to meet the few conditions of grant. Required: Journal entries for the year 2020 to 2022 (under both methods).LSE GUNS KO CULL UL SLE LLL Answer: Deduct from cost Re.000 Re. 000 Date Pareleulare T-Jan-20 PPE Cash a a PPE: 3i-Dee-20 Depreciation [(S00-300)7 5) PPE ‘GrpeeBi Depreciation SSS PPE Rep. 1-Jan-22 PPE PAL (Dep) [90/5 x 2] Cash BI-DecBd Depreciation (G407S4)7 3] PPE 28 Debit Credit 500 500 100 200 Ea 80 30 50. 54 36 30 35 unting for Government Grants and Disclosure of Government, Jaa ee 78 tonovaine Example 05 Grane relaved to asset (partial repayment) on 3 January 2020, Deep Limited incealled @ non-current asset with a cost Of Re. 500,000 and received a grant of Re. 100,000 in relation to that azzet. The asset is being depreciated on a straight- line basis over five years. Repayment: Grant of Rs. 90,000 was repaid on ist January 2022 on failing to meet the few conditions of grant. Required: Journal entries for the year 2020 to 2022 (under both methods). eee