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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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