Chapter 27
Government grants
2.1 Nature of government grants and government assistance
2.3 Recognition and initial measurement
2.3.1 Loans at less than market rates of interest
2.4 Matching grants against costs
2.4.1 Achieving the most appropriate matching
2.4.2 The period to be benefited by the grant
2.4.3 Separating grants into elements
2.5 Repayment of government grants
3.1 Presentation of grants related to assets
3.2 Presentation of grants related to income
List of examples
Example 27.1: Government grant by way of forgivable loan
Example 27.2: Loan at less than market rates of interest
Example 27.3: Grant associated with investment property
1 Introduction
IAS 20 – Accounting for Government Grants and Disclosure of Government Assistance – applied for the first time more than twenty-five years ago. [IAS 20.41]. After such a period of time it is perhaps not surprising that the standard is showing its age. The standard, in fact, pre-dates the IASB’s Framework and the IASB itself notes that it is inconsistent with it,1 resulting in the recognition in the balance sheet of deferred debits and credits that do not meet the Framework’s definitions of assets and liabilities and allowing a method of presentation that could result in an understatement of assets ...
