IAS 20 Government Grants and Disclosure of Government Assistance
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance sets out the accounting for, and the disclosure of, government grants and the disclosure of other forms of government assistance. Published April 1983. Effective 1 January 1984.
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Synopsis (including link to unaccompanied version of IAS 20)
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Government assistance aimed at long-term support of business activities in certain regions or business sectors meets the IAS 20 definition of government grants.
UK reduced disclosures
UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.
Amendments to the standard
Where an entity applies FRS 101, it is preparing Companies Act accounts rather than IAS accounts. Therefore the following amendments must be made to IAS 20 in order to achieve compliance with the Companies Act and related Regulations:
A government grant related to an asset may not be deducted in arriving at the carrying amount of the asset; instead the grant must be recognised as deferred income and recognised in profit or loss over the useful life of the asset.
A government grant related to income may not be deducted from the related expense; instead it is presented as income within profit or loss.
There are no disclosure exemptions from IAS 20 for a qualifying entity.