What is the appropriate treatment for re-payment of government grants under ASPE?
A)Accounted for prospectively.
B)Accounted for retrospectively.
C)Partial prospective treatment and partial retrospective treatment.
D)Full prospective treatment and full retrospective treatment.

Question

Quizplus · Accepted Answer

The appropriate treatment for repayment of government grants under ASPE is accounted for prospectively. This means that the repayment is recognized as a liability when it becomes due and the corresponding portion of the grant is reduced. Retrospective treatment means that the financial statements are restated to reflect the repayment of the grant, which is not appropriate in this case. Partial prospective and partial retrospective treatments are not necessary as the repayment can be accounted for prospectively. Full prospective treatment and full retrospective treatment are not applicable as only prospective treatment is necessary.

What Is the Appropriate Treatment for Re-Payment of Government Grants