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The Grant Thornton International IFRS team has published COVID-19 – Accounting Considerations for CFOs: Government Grants.
As a response to the COVID-19 global pandemic, governments around the world are implementing measures to help businesses and economies get through it. The nature of government grants can take on various forms, such as below market rate loans, short-time working subsidies, relief funds, income-based tax credits, to name just a few.
While many forms of government assistance should be accounted for by applying IAS 20 Accounting for Government Grants and Disclosure of Government Assistance, others should be addressed by other standards, such as IAS 12 Income Taxes. Entities will therefore need to assess the economic substance of any government assistance they are receiving to determine what is the appropriate accounting treatment.
The publication COVID-19 – Accounting Considerations for CFOs: Government Grants addresses four key questions to consider prior to determining the appropriate accounting treatment for government grants:
- Is the government assistance in the scope of IAS 20 or another standard?
- What is the correct recognition and measurement?
- Is it recognized in the correct period?
- How should the assistance received from governments be presented in the financial statements?
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Download the document alert_2020-06_covid-19_government-grants_p
IFRS Adviser Alert | COVID-19 – Accounting Considerations for CFOs: Government Grants