CHAPTER 16: GOVERNMENT GRANT (PAS 20)

Definition: (PAS 20; p3) govt. assistance in the form of transfer of resources in exchange of part or future
compliance with certain conditions.
Recognition: when there’s reasonable assurance that:
1. The entity will comply of the conditions of the grant.
2. The grant will be received.
Note: Grant in recognition of specific expenses shall be recognized as income over period of the related expense.
Cash 15,000,000
Deferred grant income 15,000,000
Deferred grant income 3,000,000
Grant income 3,000,000
Costs Fraction Income
2,000,000 2/10 3,000,000
3,000,000 3/10 4,500,000
5,000,000 5/10 7,500,000
10,000,000 15,000,000
*(15,000,000 – 10,000,000)/10x2
*answer+cost
Note: Grant that becomes receivable as compensation for expenses or losses (ex: loss due to earthquake) or for immediate
financial support with no further related cost shall be recognized as income immediately.
Cash 50,000,000
Grant Income 50,000,000
Note: Grant related to depreciable asset shall be recognized as income over the periods and in proportion to the depreciation of
the related asset.
Grant of 50M for acquisition of facility with an estimated cost of 80M and useful life of 5 years.
1. Cash 50M
Deferred Grant Income 50M
2. Building 80M
Cash 80M
3. Depreciation (80M/5) 16M
Acc. Depreciation 16M