I’m working on a model for a solar plant, in which the company receives a grant in t=0 to fund some CAPEX also in t=0. The grant is fully used up in t=0. I read in a previous thread that one should account for it at an income/expense level which completely offsets the number (revenue and expense in t=0). However, given that my PP&E is already topped up for the total amount and in t=0 and I have as a counterpart only the debt and equity raised also to pay for that CAPEX my balance sheet doesn’t add up. I understand it is not correct to account it as equity, therefore where should I counterbalance the PP&E total?
Thanks a lot in advance,