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sumpletion. The land was alreasly onenod ly Niuda On I March 2 0 2 1 , the goventnsent agency offered to grant a sum amounting

sumpletion. The land was alreasly onenod ly Niuda
On I March 2021, the goventnsent agency offered to grant a sum amounting to 245 of the fickory's construction cust fo a masimum of F 13 million. The grant aid was bo be payable on completion, and would he repryable un demand if total employment at the lactury fell below 300 peaple within 5 years of cempletion.
At the financial year end, 31 March 2021, Noxhy had wexpted the offer of grant aid, and had signed eontracts for the cunstruction of the factocy at a tocal coot ot +52 million. Corstruction avark was due to coemmence on 1 April 2021.
Hy 31 Mareh 2022. the lactory had been completed on budget, 400 people were employed resty to commonee manufacturing activities, and the government agency agreed that the cunditious nocistary for the drawdown of the grant had been met
On 1 Apni 2022, the foctory was brought into use. It was estimated lhat it woald have a tonycar usefu! economic life. On 2 June 2022, the govermment agency paid over the agreed +13 million. In adidicion, the compuny sough and was paid an employment grant of E1.2 miliou as cmployment exceeded original projections. This is expected to be payable annoally for 5 years in total, at a rate of 612,000 per additional person employed over 300 in each year. There are no tepayment provisions attached to the employment grant. The diroctors of Ntudu expect employment levels to exceed 350 peaple for at least 4 further years from 31 March 2023.
Required:
(a) Detail the requirements of IAS 20 Accounting for Government Grants and Disclosure of Government Assistance with respect to govermment grants to aid capital expenditure. Your answer should cover the initial recognition and subsequent treatment of these grants. (10) marks)
(b) Discuss, showing calculations and journal cntries where relevant, how Ntudu Ple should record the above transactions and events in its financial statements for years ended 31 March 2021,2022 and 2023.(10 marks)|Total: 20 MARKS|
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