PAS 19: Employee Benefits and Government Grants
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Questions and Answers

How are monetary grants typically measured?

  • At the carrying amount of loan payable to government at a below-market rate of interest
  • At the nominal amount or zero, plus direct costs incurred in preparing the asset for its intended use
  • At the fair value of non-monetary asset received
  • At the amount of cash received or the fair value of the amount receivable (correct)

    • What is the main concept in accounting for government grants?

  • Matching Concept (correct)
  • Going Concern Concept
  • Accrual Concept
  • Cash Concept

    • How are government grants related to assets presented in the statement of financial position?

  • Only gross presentation is allowed
  • Either gross or net presentation is allowed (correct)
  • Government grants related to assets are not presented in the statement of financial position
  • Only net presentation is allowed

    • How are grants related to income presented in the income statement?

    <p>Either gross or net presentation is allowed</p> Signup and view all the answers

    What happens when a government grant is recognized as income?

    <p>The entity recognizes an expense for which the grant is intended to compensate</p> Signup and view all the answers

    What is the accounting treatment for a government grant that becomes repayable?

    <p>Treated prospectively under PAS 8</p> Signup and view all the answers

    What is the fair value of the land received by Entity A from the government?

    <p>P 200,000</p> Signup and view all the answers

    What is the total cost of constructing the building by Entity A?

    <p>P 1,000,000</p> Signup and view all the answers

    What is the estimated useful life of the building?

    <p>10 years</p> Signup and view all the answers

    What is the income from the government grant in 20x1?

    <p>P 0</p> Signup and view all the answers

    What is the depreciation expense recognized in 20x3?

    <p>P 20,000</p> Signup and view all the answers

    What is the carrying amount of the building on December 31, 20x2 under the gross presentation?

    <p>P 900,000</p> Signup and view all the answers

    What is the carrying amount of the building on December 31, 20x2 under the net presentation?

    <p>P 720,000</p> Signup and view all the answers

    When does the building start to be depreciated?

    <p>In 20x2</p> Signup and view all the answers

    What is the residual value of the building?

    <p>P 0</p> Signup and view all the answers

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