1. 5-1 Topic 1 Tangible Non-current Assets IAS 20 Accounting for Government Grants Key Definitions Government grants are assistance in form of cash or assets in return for past future compliance with conditions relating to enterprise’s operating activity.

2. 5-2 Topic 1 Tangible Non-current Assets IAS 20 Accounting for Government Grants Accounting Treatment Recognize in income statement to match with expenditure towards which grants are intended to contribute if: All of the conditions for receipt have been complied with There is reasonable assurance that the grant will be received.

3. 5-3 Topic 1 Tangible Non-current Assets IAS 20 Accounting for Government Grants Accounting Treatment Grants related to assets: are government grants whose primary condition is that an entity qualifying got them should purchase, construct or otherwise acquire long-term assets. IAS 20 permits two treatments. Both treatments are equally acceptable and capable of giving a true and fair view.

4. 5-4 Topic 1 Tangible Non-current Assets IAS 20 Accounting for Government Grants Accounting Treatment Method 1: write off the grant against the cost of the non-current asset and depreciate the reduce cost. Method 2: treat the grant as deferred income and transfer a portion to revenue each year, so offsetting the higher depreciation charge on the original cost. If the government grant is to repaid, set against the deferred income.

5. 5-5 Topic 1 Tangible Non-current Assets IAS 20 Accounting for Government Grants Accounting Treatment Grant related to income: According to IAS 20, grants related to income are government grants other than those related to assets. These grants may be presented Either as income (a separated credit or under ‘other income in SOCI) or As a deduction from the related expense