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      Question

      Which accounting treatment is correct for government

      grant related to income under Ind AS 20?
      A Recognise grant immediately in equity only Correct Answer Incorrect Answer
      B Recognise either as deferred income and amortise to profit or deduct grant from related expense; recognise in P&L over periods necessary to match with related costs Correct Answer Incorrect Answer
      C Always treat as tax liability Correct Answer Incorrect Answer
      D Always capitalises in intangible assets Correct Answer Incorrect Answer

      Solution

      Ind AS 20 allows for two presentation methods for grants related to income: setting up the grant as deferred income or deducting it from the related expense.

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