PAS 20: GOVERNMENT GRANT

Definition
- PAS 20, paragraph 3, defines government
grant as 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 and measurement
Government grant shall be recognized when there is
reasonable assurance that:
a. The entity will comply with the conditions
attaching to the grant.
b. The grant will be received
Classification of Government Grant
a. Grant related to asset
b. Grant related to income
Accounting for Government Grant
- It is taken to income over one or more periods
in which the related cost is incurred.
Government Assistance
- Is action by government designed to provide
economic specific to an entity or range of
entities qualifying under certain criteria.
Government assistance does not include the
following indirect benefits not specific to an entity:
a. Infrastructure in development areas such as
improvement to the general transport and
communication network.
b. Imposition of trading constraints on
competitors.
c. Improved facilities such as irrigation for the
benefits of an entire local community.
Disclosure about Government Grant
- It is not required to disclose the name of the
government agency that gave the grant along
with the date of sanction of the grant by such
government agency and the date when cash
was received in case of monetary grant