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Green Pastures received a grant of P60 million to compensate it for costs incurred in planting Narra trees over a period of 5 years. Green Pastures will recur such costs in this manner:  Year          Costs 1                2M 2                4M 3                6M 4                8M 5                10M Total costs thus incurred will aggegate P30 M. Required: Based on the provisions of PAS 20, Government Grants, how should Green Pastures treat the “grant” in the books?

Green Pastures received a grant of P60 million to compensate it for costs incurred in planting Narra trees over a period of 5 years. Green Pastures will recur such costs in this manner:  Year          Costs 1                2M 2                4M 3                6M 4                8M 5                10M Total costs thus incurred will aggegate P30 M. Required: Based on the provisions of PAS 20, Government Grants, how should Green Pastures treat the “grant” in the books?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Green Pastures received a grant of P60 million to compensate it for costs incurred in planting Narra trees over a period of 5 years. Green Pastures will recur such costs in this manner: 

Year          Costs

1                2M

2                4M

3                6M

4                8M

5                10M

Total costs thus incurred will aggegate P30 M.

Required: Based on the provisions of PAS 20, Government Grants, how should Green Pastures treat the “grant” in the books?

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