How does IFRS require that government grants for property, plant and equipment (PPE)be recorded?
A)The government grant should be recorded directly to equity.
B)The government grant should be recorded indirectly to equity via income.
C)The government grant should not be recorded directly to equity via income.
D)The government grant should not be recorded directly to equity.

Question

Quizplus · Accepted Answer

Under IFRS, government grants related to PPE can be recorded by reducing the carrying amount of the asset (and thus reducing depreciation expense over the asset's useful life) or as deferred income that is recognized in profit or loss on a systematic basis over the useful life of the asset. This approach indirectly affects equity via income.

How Does IFRS Require That Government Grants for Property, Plant