i need to know the double entries regarding following case.

Question

My company receives 01/04/2013 1Mn government grant as money. then company bought a machine same date worth of 1Mn using the government grant. machine depreciates 20% per year. how to account these transactions at the end of a financial year.

Answer 1

!AS 20.17 grants related to depreciable assets are usually recognised in profit or loss over the periods and in the proportions in which depreciation expense on those assets is recognised.

Dr - Bank
Cr - Govt grant a/c (asset)

Grant a/c can be released to P&L over the useful life of the asset (20% each year)
Dr -Gvt grant a/c
Cr - Other income

Comments

What about the depreciation of the asset?

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Asset can be separately depreciated. this is about the amount received as grant.