Reviewer - Government Grant PDF

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Summary

PAS 20“Assistance by government in the form of transfer of resources to an entity in return for part or future compliance with certain conditions relating to the operating activities of the entity”RECOGNITION 1. Reasonable assurance that the attached conditions will be complied with 2. The grant wil...

Description

PAS 20 “Assistance by government in the form of transfer of resources to an entity in return for part or future compliance with certain conditions relating to the operating activities of the entity”

RECOGNITION 1. Reasonable assurance that the attached conditions will be complied with 2. The grant will be received

MEASUREMENT MONETARY GRANTS

NON-MONETARY GRANTS

• Amount of cash received • FV of the amount receivable

LOAN GRANTS

• FV of the non-monetary asset • Forgivable Loans – CA of the loan received forgiven • At nominal value • Loan at below-market rate of interest or zero-interest – difference b/w FA and PV of the loan

APPROACHES TO THE ACCOUNTING FOR GOVERNMENT GRANTS CAPITAL APPROACH

INCOME APPROACH

Grant is recognized outside P/L or in equity

Grant is recognized in P/L over one or more periods

TYPES OF GOVERNMENT GRANTS GRANT RELATED TO ASSETS

GRANTS RELATED TO INCOME

ACCOUNTING TREATMENT

Recognized in P/L over the periods and in the proportions in which depn. Exp. is recognized Recognized in P/L when the costs of fulfilling RELATED TO NON-DEPRECIABLE ASSETS the attached condition are incurred. GRANT IN RECOGNITION OF SPECIFIC Recognized in P/L over the period of the related EXPENSES expense GRANT RECEIVED AS FINANCIAL AID Recognized immediately in P/L when the grant FOR EXPENSES OR LOSSES ALREADY becomes receivable RELATED TO DEPRECIABLE ASSETS

INCURRED...