International Financial Reporting Standards_guide.pdf

Chapter 28 Accounting for Government Grants and Disclosure of Government Assistance (IAS 20) 305
Subsequent Measurement
28.4.6 A repayment of a government grant is accounted for as a revision of an accounting
estimate (refer to IAS 8) as follows:
■ Repayment related to income is first applied against an unamortized deferred grant
credit.
■ Repayment in excess of a deferred grant credit is recognized as an expense.
■ Repayment related to an asset is recorded by increasing the carrying amount of the
asset or reducing a deferred income balance. Cumulative additional depreciation that
would have been recognized to date is recognized immediately and the asset would
then be subject to an impairment test.
28.5 PRESENTATION AND DISCLOSURE
28.5.1 Presentation is as follows:
■ Asset-related grants. Present the grant in the Statement of Financial Position by
either:
– recording the grant as a deferred income liability or
– deducting it from the carrying amount of the asset.
■ Income-related grants. Present the grant in the Statement of Comprehensive Income
as either:
– a separate credit line item; or
– a deduction from the related expense.
28.5.2 Disclosure is as follows:
■ Describe the accounting policies related to method of presentation and method of
recognition.
■ Include the following in the Statement of Comprehensive Income and notes:
– government grants (describe the nature, extent, and amount);
– government assistance (describe the nature, extent, and duration);
– unfulfilled conditions; and
– contingencies attached to assistance.
28.6 COMMENTARY
28.6.1 Government assistance to entities can be aimed at encouragement or long-term support
of certain industries or regions. The conditions for receiving the assistance do not necessarily
relate to the operating activities of the entity. The issue has arisen in practice as to
whether such government assistance is within the scope of IAS 20. The IASB issued SIC 10
clarifying that this government assistance meets the definition of a government grant and
should be included in IAS 20.
28.6.2 The IASB has not indicated that any projects regarding IAS 20 are being planned.