CAF-1 · Chapter 13 · Question 5 of 15
Under the deferral method, how should an NPO account for a tangible capital asset procured using a restricted government grant?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The grant may be recognized by deducting it from the carrying amount of the asset or recorded as deferred income.
Explanation
A tangible capital asset procured from a grant may be recognized at its carrying amount by deducting the grant, or by setting up the grant as deferred income to be recognized over the asset's life.
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