Your Manager Mrs. Mutusi recently attended a conference in Dubai entitled, Assistance Government grants for Africa.

The meeting was so insightful and a lot was discussed, it was one of an eye opener for me, he said. The only sad thing is that I lost my note book where I jotted my notes with regards to government grants, he added. Mrs. Mutusi then asked you to prepare brief notes on key issues with regards to government grants, of which you did.

After you explained to her, Mrs Mutusi is so much excited about the concept of a Government grant. She decided to take action and put theory into practice. She instructed you as an Accountant to apply for a government grant for the acquisition of Machinery. Your application was successfully submitted to the Ministry of Trade and Investment and they were happy with it because the Ministry wants to support local investors. In a weeks time, your organization, Ditiro Ltd, received a favourable response. The company was given a Government grant of P10 000 000 to acquire an Asset costing P100 000 000 depreciating at 20% straight line.

Required

Assume that your company uses Income based Approach to account for grants from the Ministry, prepare the extracts of the financial statements for the 5 year period 2019-2023, assuming that the letter informing your of your companys successful application of the grant was received on 7 January 2019.