On 1 January 20X6, Juwita Bhd. received a government grant of RM5,000,000 for the purchase of...

On 1 January 20X6, Juwita Bhd. received a government grant of RM5,000,000 for the purchase of a machinery costing RM8,000,000. The useful life of the machinery was 5 years. The company adopts the deferred income method for the treatment of the government grant. On 1 January 20X8, the company fails to comply with the conditions attached to the grant by the government.

Required: State the accounting treatment for the government for the year ended 30 June 2018, in accordance with MFRS120 Accounting for Government Grants and Disclosure of Government Assistance

Expert Solution

Hence refund of Govt Grant Journalise in above manner. and disclosure required in financial statements below:

1. Conditions which company failed to meet due to which refund of grant arises.

2. effect of refund of grant on income statement.

ekkarill92 answered 1 year ago

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