Grants related to assets may be presented as deferred income or recognized in profit or loss over the life of a depreciable asset as a reduction in depreciation expense.

Question

Quizplus · Accepted Answer

Grants related to assets can indeed be presented in two ways according to IAS 20: either as deferred income, which is recognized in profit or loss over the life of the asset, or by deducting the grant from the carrying amount of the asset, thereby reducing the depreciation expense over the asset's useful life.

Grants Related to Assets May Be Presented as Deferred Income