1. Chapter 14 Government grants

2. Government grants Concepts: Government grants, is free to obtain business from government or non-monetary assets, monetary assets, but does not include the government as a business owner invested capital. Government grants are usually in the form of monetary assets. Features: 1. free sex 2. direct access to assets (direct sex) does not involve the transfer of assets of financial support does not belong to government subsidies. 3. government capital investment in value-added export tax rebate is not a government subsidy, in essence, to return.

3. Form  1 Financial allocations  2 Financial discount  3 tax return In addition to the tax return other than the tax benefits are not government grants.  4 free non-monetary assets allocated

4. Accounting subject  1 、 belong to government capital investment or through paid-up capital, should be paid special to account cash in bank Special payables Capital surplus  2 、 treatment of accounting ： Income Approach Capital approach, Capital approach includes total method and net method.In china,it uses total method.  3 、 deferred income belongs to liability; non-operating income belongs to profit and loss account

5.  Government grants related to assets are divided into government subsidies and income-related government subsidies.  Government grants related to assets, is obtained by the enterprise, for purchase or construction, or other form of government grants long-term assets.  Government grants related to income, is in addition to government grants related to assets other than government grants.  Comprehensive project of government subsidies, should be accounted for, respectively, after decomposition, the overall classification is difficult to distinguish between the benefits associated with government subsidies.

6. Accounting measurement.  Government grant is a monetary asset, and some confirmed by measuring the amount paid, and some confirmed by measurement of the amount receivable. cash in bank non- operating income  Non-monetary assets should be measured at fair value; fair value can not be obtained, nominal amount  Government grants related to assets should be recognized as deferred income, and evenly in the underlying assets, profit or loss. However, the nominal amount of government subsidies, direct income statement.

7.  Government grants related to income, the following conditions should be handled separately: (A) to compensate for the related future business expenses or losses are recognized as deferred income and recognized in the period costs, profit and loss. (B) have occurred to compensate for business expenses or losses related directly to the income statement.

8. Income-related companies received government subsidies to compensate for the costs or losses in subsequent periods when: cash in bank deferred revenue Period in the event of loss, according to the amount of compensation deferred revenue non-operating expenses For compensation for expenses or losses have occurred cash in bank non-operating expenses