Government Grants (PAS 20) Problem 1. On January 1, 2015, SMDC Inc. was granted a non-interest bearing loan from Bangko Sentral ng Pilipinas with a face value of P1,000,000, term of 3 years and implicit rate of 10%. SMDC received the face value of the loan on the condition that the company will continuously operate for the 3-year term of the loan. Required: Based on the result of your audit, determine the following: __________1. Realized income from government grant for the year ended December 31, 2015 __________2. Book value of deferred income from government grant as of December 31, 2015
Government Grants (PAS 20)
Problem 1. On January 1, 2015, SMDC Inc. was granted a non-interest bearing loan from Bangko Sentral ng Pilipinas with a face value of P1,000,000, term of 3 years and implicit rate of 10%. SMDC received the face value of the loan on the condition that the company will continuously operate for the 3-year term of the loan.
Required: Based on the result of your audit, determine the following:
__________1. Realized income from government grant for the year ended December 31, 2015
__________2. Book value of deferred income from government grant as of December 31, 2015
Problem 2. On January 1, 2021, ALI Inc. received P2,000,000 from national government on the condition that the company will construct an environmentally-friendly building with a cost of P13,000,000 and useful life of 10 years and residual value of P1,000,000. On January 1, 2023, the government grant became repayable as a result of ALI Inc.’s failure to comply with the environmentally-friendly specification requirement of the government grant condition.
__________1. Loss on repayment of government grant on January 1, 2023 if the company accounts for the government grant as deferred income
__________2.
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