Grant related to income
Recognise the grant when there is reasonable assurance that the entity will comply with its conditions and receive it. Recognise the income systematically in the periods in which the related costs are expensed. IAS 20 permits presentation separately or under a general heading such as other income, or deduction from the related expense, subject to the standard. Compensation for expenses or losses already incurred may have a different recognition pattern.
Worked example
An entity incurs eligible training costs of $40,000 and becomes reasonably assured of receiving a $15,000 reimbursement. Assuming the related costs are expensed in the current period, the grant is recognised in profit or loss in that period.
Common mistake
Deferring a grant indefinitely after its related costs have been expensed, or recognising it before reasonable assurance exists.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |