Government Grants
What standard governs Government Grants and Government Assistance?
IAS 20
What standard governs Exploration for and Evaluation of Mineral Resources?
What standard governs Borrowing Costs?
IAS 23
Aaliyah Alexah Company bought a delivery car for P500,000. A down-payment of P100,000 was paid and the balance payable in two equal annual installments through an interest-bearing note. The imputed rate was 12%. How much is the delivery car in Aaliyah Alexah's books?
P500,000
What song did the fictional school International State College of the Philippines use as their Angelus?
Angel Baby by Troye Sivan
What are the two types of Government Grants?
Grants related to assets and Grants related to income
This asset has a limited life span and irreversibly declines in value over time
Wasting assets
This asset takes a substantial period of time to get ready for its intended use.
Qualifying Asset
Kanino Ka Lang? Company and Sayo! Company exchanged equipment with the following information:
Kanino Ka Lang? Company
Cost - 1,000,000
Accumulated Depreciation - 400,000
Fair Value - 800,000
Sayo! Books
Cost - 1,200,000
Accumulated Depreciation - 550,000
Fair Value - 600,000
What is the entry to record the exchange in Kanino Ka Lang?'s Books?
Dr. Equipment - new 800k
Dr. Accumulated Depreciation 400k
Cr. Equipment - old 1M
Cr. Gain on Exchange - 200k
What was One Direction's first single after Zayn left the band?
Drag Me Down
When will you recognize a government grant in your books?
Once there is reasonable assurance that the entity will comply to the conditions and that the grants will be received.
How do we subsequently measure E&E assets?
Complete the sentence: Borrowing costs that are _______ to the acquisition, construction, or production of an asset are capitalizable.
directly attributable
On January 1, 2022, Hamza Khan Company acquired equipment to be used in its manufacturing operations. The equipment has an estimated useful life of 10 years and an estimated residual value of P50,000. The depreciation applicable to this equipment was P240,000 for 2024 computed under the sum of years’ digits method. What was the acquisition cost of the equipment?
P1,700,000
What do you call a snake that eats its own tail?
Ouroboros
What are the two approaches to accounting for Government Grants?
Capital Approach and Income Approach
What is the formula for depletion rate?
(Total cost of wasting asset less residual value) /
Estimated resource deposit to be extracted
Capitalization of borrowing costs commence when?
When it meets ALL of the following criteria: Expenditures are incurred, borrowing costs are incurred, activities that are necessary to prepare the asset for its intended use is in progress.
On January 1, 2022, Angel Almighty Company bought a new building at a cost of P5,000,000. Depreciation was computed on a straight-line basis at 4% per year. On January 1, 2027, the building was revalued at fair value of P7,000,000. Ignore tax. How much is the depreciation expense on December 31, 2027?
P350,000
What is my favorite book series?
The Arc of a Scythe
How do you present Grants related to Assets in your Financial Statements?
Either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset
The total cost of the wasting asset includes 4 things. What are they?
Acquisition Cost, Exploration Cost, Development Cost, and Restoration Cost.
What are the disclosures required under Borrowing Costs?
The financial statements shall disclose:
a. The accounting policy adopted for borrowing costs;
b. The amount of borrowing costs capitalized during the period; and
c. The capitalization rate used to determine the amount of borrowing costs eligible for capitalization.
Señor Saguaro Company acquired a machine on January 1, 2022 for P10,000,000. The machine has an 8-year useful life with a residual value of P1,000,000 and was depreciated using the sum of years’ digits method. Señor Saguaro recorded a full year’s depreciation on the asset in 2022 and 2023. In January 2024, Señor Saguaro estimated that the asset’s useful life from the date of acquisition should have been 6 years and its residual value is P400,000. What is the accumulated depreciation on December 31, 2024?
P6,090,000
What is my favorite food? (clue: sweet)
Donuts uwu >.<
(preferably un may hole in the middle)