IAS 20 – Accounting for Government Grants and Disclosure of Government Assistance

Introduction

International Accounting Standard 20: Accounting for Government Grants and Disclosures of Government Assistance answers the critical questions like how to account for any help or assistance provided by government or similar body to aid entity in its operations.

Executive Summary

IAS 20 states that assistance may be provided in capital or revenue expenditures. Depending on the expenditure to which grant is given the accounting treatment is incorporated in the financial statements. Under both the grants, management has the option to treat grant as a separate item in the financial statement or deduct from the related expenditure that will result in expenditure being reported on net basis.