Accounting · IAS 20 Accounting for Government Grants
On 1 August 20X4, Flash Co received a $12m training grant from the government on the condition that it employed ten graduates from local universities in each of the next three years. If the condition were broken, the full amount would be repayable. On receipt, meeting the condition was virtually certain, and the grant was amortized systematically over three years. However, in August 20X6, Flash Co decided not to employ any more graduates. By how much will Flash Co's operating profit for the year ended 31 July 20X7 be reduced as a result of the repayment of the grant?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It will not be reduced
- 2$4m
- 3$8m✓
- 4$12m
Correct answer
$8m
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