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Amankus Company obtained a grant of GHS 10 million from a government agency for an...

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Accounting

Amankus Company obtained a grant of GHS 10 million from a government agency for an investment project to construct a manufacturing plant of at least GHS88 million. The principal term is that the grant payments relate to the level of capital expenditure. The secondary intention is to safeguard 300 jobs. The grant will have to be repaid pro-rata if there is under spending on capital. Twenty percent of the grant will have to be repaid if the jobs are not safeguarded within 18 months after the date of the last asset purchase.

The plant was completed on 1 January 2008 at a total cost of GHS90 million. The plant had an expected useful life of 20 years and is depreciated on a straight line basis with nil residual value. Amankus Company adopts the policy of setting government grant up as deferred income.

Required:

Show the relevant Income statement and Statement of financial position extracts as well as the relevant disclosures in the 2008 final accounts.

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