Government grant
A government grant is assistance by government in the form of a transfer of resources to an entity in return for past or future compliance with conditions related to its operating activities, subject to the applicable definition and exclusions. IAS 20 addresses recognition, presentation and disclosure.
Worked example
A business receives a grant conditional on acquiring equipment; the auditor inspects the agreement and evaluates recognition, presentation and compliance with conditions.
Common mistake
Do not recognise every grant as income when received without considering the conditions and applicable IAS 20 requirements.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Supporting | September 2026–June 2027 |
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |