Question
On 1 January 20X1 Sty received 1m from the local government on the condition that they employ at least 100 staff each year for the
On 1 January 20X1 Sty received 1m from the local government on the condition that they employ at least 100 staff each year for the next 4 years. Due to an economic downturn and reduced consumer demand on 1 January 20X2, Sty no longer needed to employ any more staff and the conditions of the grant required full repayment. What should be recorded in the financial statements on 1 January 20X2?
A Reduce deferred income balance by 750,000 B Reduce deferred income by 750,000 and recognise a loss of 250,000 C Reduce deferred income by 1,000,000 D Reduce deferred income by 1,000,000 and recognise a gain of 250,000
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