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Government grants are recognised only where it is reasonably certain that an entity will comply with conditions attached to the grant.
- Grants are recognised as income over the period necessary to match them with related costs for which they are intended to compensate. Grants are not recognised in equity.
- A grant receivable as compensation for expenses already incurred is recognised as income when it becomes receivable.
- A grant related to assets is presented in the statement of financial position either as deferred income or as a deduction from the carrying value of the related asset.
- A grant related to income may be presented as an item of income or deducted in reporting the related expense.
- Where grants become repayable, they are treated as a change in estimate.
Related IFRIC interpretations
UK reduced disclosures – FRS 101
UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Our FRS 101 page gives more information on which entities qualify and the criteria to be met.
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