IAS 20 Government Grant

This is a post of my own detailed and thorough explanation on the standards of the subject I'm taking, P2 Corporate Reporting (ACCA)

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IAS 23 Government Grant

It is an assistance from government in the form of a transfer of monetary and non-monetary resources. Non- monetary grant is measured based on the fair value of the asset transferred/received. Meanwhile, government assistance cannot be recognized because it cannot be measured as it is just a technical advise or marketing advise. Government grant can only be recognized when entity comply with the condition and the grant will be received.

There are two types of government grant :
Asset based grant is a grant given to company for the acquisition of asset and it is to be set off from asset when it is received where you,
DR Bank
     CR Property, Plant and Equipment
If there is any deferred/future income,
DR Bank
     CR Government Grant  
the government grant is to be amortized based on its useful life to Profit or Loss as income.

Revenue based grant is a grant given to company for certain types of business and is to be recognized as income when it is received.
DR Bank
     CR Profit or Loss (Income)
Disclosure for other income is to reduce the expenses which it is related.

Grant is repayable when there is change in the accounting estimate.

Ends,