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IND AS 20:- Government Grant
Government Grant\assistance:-
Government Grant\assistance include benefits In terms of transfer of resources
based on Compliance with past or future condition which are related to operations.
Scope:-
Scoped In items: -
1. Grant whose valve can be placed and which is entity specific
2. any forgivable loan is also considered Grant Provided all the condition are
satisfied.
Scoped out items: -
1. Benefits for General for trading condition. Eg: Infrastructural facility,
transportation network etc
2. Benefits in terms of determination of taxable profit or loss. Eg:- Tax holiday
period.
3. Govt participation in ownership of entity
4. Govt Grant covered by Ind As -41
Recognition criteria:-
IND AS 20:- Government Grant 1
, There is a reasonable assurance that condition related to grant will be satisfied and
there is a Reasonable that Grant will be received.
Accounting approach for government grant:-
1. Capital approach in which government are recorded directly as a part of equity
—-> IND AS 20
2. Revenue approach in which government Grant are credit to P&L account over
one or more reporting period
Revenue approach is more appropriate because it provide systematic allocation
of grand based on compliance of condition of grant and it provide fulfillment of
matching concept
If there are no condition attached with grant then enter amount will be taken
to P&L account
If there are condition attached with grant then Grand will be deferred and journal
entries will be as follows:-
IND AS 20:- Government Grant 2
IND AS 20:- Government Grant
Government Grant\assistance:-
Government Grant\assistance include benefits In terms of transfer of resources
based on Compliance with past or future condition which are related to operations.
Scope:-
Scoped In items: -
1. Grant whose valve can be placed and which is entity specific
2. any forgivable loan is also considered Grant Provided all the condition are
satisfied.
Scoped out items: -
1. Benefits for General for trading condition. Eg: Infrastructural facility,
transportation network etc
2. Benefits in terms of determination of taxable profit or loss. Eg:- Tax holiday
period.
3. Govt participation in ownership of entity
4. Govt Grant covered by Ind As -41
Recognition criteria:-
IND AS 20:- Government Grant 1
, There is a reasonable assurance that condition related to grant will be satisfied and
there is a Reasonable that Grant will be received.
Accounting approach for government grant:-
1. Capital approach in which government are recorded directly as a part of equity
—-> IND AS 20
2. Revenue approach in which government Grant are credit to P&L account over
one or more reporting period
Revenue approach is more appropriate because it provide systematic allocation
of grand based on compliance of condition of grant and it provide fulfillment of
matching concept
If there are no condition attached with grant then enter amount will be taken
to P&L account
If there are condition attached with grant then Grand will be deferred and journal
entries will be as follows:-
IND AS 20:- Government Grant 2
