ACCA · Question 18 · Government Grants
SECTION B - CASE 1: AeroTech Drones
AeroTech Drones Co manufactures specialized agricultural drones. The year-end is 31 December 20X5.
On 1 January 20X5, AeroTech received a government grant of $300,000 towards the purchase of specialized manufacturing equipment costing $1,500,000. The equipment has a useful life of 5 years. AeroTech's accounting policy is to treat government grants as deferred income.
What amounts will be presented in the Statement of Financial Position at 31 December 20X5 regarding the equipment and the grant?
Answer options:
Equipment: $960,000; Deferred Income: $0
Equipment: $1,200,000; Current Deferred Income: $60,000; Non-Current Deferred Income: $180,000
Equipment: $1,200,000; Non-Current Deferred Income: $240,000
Equipment: $1,500,000; Current Deferred Income: $60,000; Non-Current Deferred Income: $240,000
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