Assume that a government received a $5,000,000 expenditure-driven grant in Year 1 for a project that was expected to take three years to complete. Further assume that qualifying expenditures for the project, which actually took four years to complete, were as follows: Year 1 - $1,000,000; Year 2 - $2,500,000; Year 3 - $1,000,000; Year 4 - $400,000. The government should report grant revenues in Year 2 in the amount of

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The government should recognize grant revenue in the year in which the qualifying expenditures are incurred. In this case, $1,000,000 of qualifying expenditures were incurred in Year 1, $2,500,000 in Year 2, $1,000,000 in Year 3, and $400,000 in Year 4. Therefore, the government should recognize $2,500,000 of grant revenue in Year 2.

Assume That a Government Received a $5,000,000 Expenditure-Driven Grant in Year