IAS 20

Accounting For Government

Assistance
Objective

۩To prescribe the accounting

treatment for government assistance
۩An appropriate methods of transfer of
resources
۩Indication of beneficiary
Scope and Application

۩Apply to all Grants BUT

NOT TO
۩Grants in form of Benefits (Tax
Holidays)
۩Government participation
۩Grant Under IAS 41 (Agriculture)
Definitions

۩Grant (Subsidies, Premium)

۩Fair Value
۩Forgivable loan
۩Government
Accounting Treatment
۩ Capital Approach
Under which grant Cr. to shareholder’s
Interest
۩ Income Approach
Grant taken as income over the period of
time
“As Income and other taxes charged if
Grant relates to Depreciable assets”

Grant Of Land = Non depreciable

Presentation Of Grant
۩ Grants relates to Assets
Non Monetary grants at fair value set off
set up grant as differed income
deduct grant from carrying cost/amount of assets
۩ Grant relates to income
As a differed income under head of “Other Income” Or
Deduct from relative expenses
۩ Repayment of Govt grants
Repayment recognized as expense
Reducing the differed income balance
۩ Forgivable loan
If the entity meet terms for forgiveness
۩ Non monetary grants
Record both grant and assets
۩ Government Assistance
Free Technical, Marketing, and other support
Disclosures

Accounting policy for method

presantation
Forms of Govt assistance
Conditions and contingencies