Hello,
In the WTO annual report there is a provision for a right of use of a land and a building shown in Equity.
The variance year over year of this provision is the 0.6 depreciation which increases profit.
This land and building were donated by the local government years ago and WTO follows IPSAS not IFRS. I know this forum is IFRS but still will raise the question.
For grants, is the normal accounting practice to report a provision in Equity? and should not be the counterpart a Right of use asset [ASSET] – that I do not see in the BS attached ?
Also struggling to understand why the depreciation increases and not decreases the profit. Any thoughts?
Thanks
Regards
Cecilia
https://docs.wto.org/dol2fe/Pages/FE_Se ... anged=true
Land and Building Grant:Provision for right of use shown in Equity
Re: Land and Building Grant:Provision for right of use shown in Equity
it's not under IFRS so I'm moving this topic to general accounting discussion
Maybe the building is included in the 'buildings' part of assets and its depreciation is included in total depreciation
at the same time, the equity part is recycled to P&L to show the consumption of the grant (DR equity CR P&L)
but it's just a guess, I know nothing about IPSAS
Maybe the building is included in the 'buildings' part of assets and its depreciation is included in total depreciation
at the same time, the equity part is recycled to P&L to show the consumption of the grant (DR equity CR P&L)
but it's just a guess, I know nothing about IPSAS
Re: Land and Building Grant:Provision for right of use shown in Equity
and why do you find WTO's annual report interesting if I may ask?
Re: Land and Building Grant:Provision for right of use shown in Equity
I applied to a position and just gathering some information.
Further in the report it is stated: “A provision for the right of use of the building is reported as part of the equity of the WTO and has appreciated accordingly using the same rate of depreciation as that of the Building, resulting in a net-off effect."
So, if I understood you correctly, your guess was right.
Further in the report it is stated: “A provision for the right of use of the building is reported as part of the equity of the WTO and has appreciated accordingly using the same rate of depreciation as that of the Building, resulting in a net-off effect."
So, if I understood you correctly, your guess was right.