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Pas 20 Government Grants: Nature: Government Grant Government Assistance

This document outlines accounting standards for government grants under PAS 20. It discusses: 1) How government grants are recognized as income over periods that related costs are incurred or the useful life of related assets. Grants related to expenses are recognized as income over the same period as expenses, while grants related to assets are recognized over the asset's useful life. 2) Measurement of grants, which depends on if they are related to assets or income. Grants related to assets reduce the carrying amount. 3) Disclosure requirements which include the accounting policy, nature and extent of grants, and any unfulfilled conditions.

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Kristalen Armando
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172 views2 pages

Pas 20 Government Grants: Nature: Government Grant Government Assistance

This document outlines accounting standards for government grants under PAS 20. It discusses: 1) How government grants are recognized as income over periods that related costs are incurred or the useful life of related assets. Grants related to expenses are recognized as income over the same period as expenses, while grants related to assets are recognized over the asset's useful life. 2) Measurement of grants, which depends on if they are related to assets or income. Grants related to assets reduce the carrying amount. 3) Disclosure requirements which include the accounting policy, nature and extent of grants, and any unfulfilled conditions.

Uploaded by

Kristalen Armando
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PAS 20 GOVERNMENT GRANTS

NATURE:
Government Grant Government assistance

Assistance by government in form of transfer Government assistance is action of


with condition to comply in return related to government to provide economic benefit
its operating activity. specific to an entity

RECOGNITION:
a. Comply the conditions
b. Grant will be received

MEASUREMENT: fair value

Grant Related to Asset Grant Related to Income


- condition to purchase, acquire, or - If not related to asset
construct long-term asset
Presented in the income statement either:
Presented in the statement of financial
position as either: a. Separately
b. Other income
a. Deferred income or recognize as
income over its useful life (parang Alternatively deducted from the related
depreciation method din) expense
b. By deduction from the carrying
amount or presented on its net
amount or net cost. This net amount is
the recognition of the depreciation
equal to the profit and loss.
(binabawas sa cost of asset yung
grant before I’depreciate)

ACCOUNTING FOR GOVERNMENT GRANT


Recognized as income over one or more period in which related cost is incurred
1. Grant in recognition of specific expense shall be recognized as income over the (same)
period of the related expense
o Allocate as income over the years proportion to cost incurred
2. Grant related to depreciable asset shall be recognized as income over the periods and
in proportion to the depreciation of the related asset.
o Depends what depreciation method to use
3. Grant related to nondepreciable asset requiring fulfillment of certain conditions shall be
recognized as income over the periods which bear the cost of meeting the conditions.
PAS 20 GOVERNMENT GRANTS
o Allocated over the useful years of the condition
4. If the grant becomes receivable of financial support for loss or expenses incurred, it is
recognized as income on the period it became receivable immediately
o Income immediately

Repayable Grant is accounted as change in accounting estimate


o If related to income – applied first against the deferred income balance and any
excess shall be expensed immediately
o If related to asset
 If deduction approached is used
 increase in carrying amount
 in the date of absence, recognize as expense the cumulative
additional depreciation.

DISCLOSURE
1. Accounting Policy adopted for Government grant
2. Nature and extent of the Government grant
3. Unfulfilled conditions and other contingencies

Notes: It is not required to disclose the name, date of sanction of grant and date when
monetary cash received

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