Hi,
My company has entered into an arrangement with one of our customer wherein the customer will reimburse 50% of the cost of a new asset needed to enhance the quality of the products supplied to him. The amount reimbursed by the customers shall be non-refundable and the company doesn't have any legal agreement for any fixed quantity to supply.
The cost of asset is $ 50,000/- I am of the view that this should be treated as a grant under IAS 20, and we should record asset at 25,000 (after deducting the amount received from the customer).
Your views are welcomed.
Thanks.
Musawar