Cadet acquires equipment costing 500,000 and receives a grant of 100,000. Useful life: 5 years, straight-line depreciation with no residual value (case conventions). Calculate the net charge in profit or loss for the year if the grant is presented as deferred income (depreciation on gross cost less release), then the depreciation charge if it is deducted from the carrying amount, and the difference in profit or loss between the two methods.
- Cost of the equipment
- 500,000
- Grant received
- 100,000
- Useful life
- 5