Question

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?

Answer 1

You should definitely post these sorts of questions in the Finance group, as this group is for Feedback on the site in general.

None the less, I'll tell you that government grants are nearly always cash grants up front and you can consider them to be offset to the initial investment in year 0.