Finance question--A company is looking into a project. The intial costs are $11M to purchase assets. The governement is providing assistance by giving the company $6.5M. I would like to confirm whether this assistance should reduce the intial cost of the assets in one shot or the $6.5M should be amortized during the life of the asset by reducing the depriciation cost?
Stacey Warren - Expert brainly.com
Hey! We 've verified this expert answer for you, click below to unlock the details :)
At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga.
Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus.
Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.
I got my questions answered at brainly.com in under 10 minutes. Go to brainly.com now for free help!
the assistance from the govt should be treated by reducing the cost of assets in the beginning of the project or by reducing over the life of the project.
I think that this assistance should be amortized during the life of the asset by reducing the depriciation cost because it shows that this cost is the initial value of the asset. I said that instead of borrowing money from the bank, the govent give you money to buy assets for business. It is the similar thing but it is different for the pattern. Hope to help you