ACYFARP: Government Grant

Government Grant

Assistance by the government in the form of transfers of resources to an entity in return for part or future compliance with certain conditions relating to the operating activities of the entity.

Government Grant

Sometimes called by other names such as subsidy, subvention, or premium

Fair Value

The recognition and measurement of government grant, including nonmonetary grant. It is recognized when there is reasonable assurance that:

a. The entity will comply with the conditions attaching to the grant.

b. The grant will be received.

Accrual Basis

The income recognition of a government grant, that is consistent with the generally accepted accounting principles.

Grant Related to Asset

This is a government grant whose primary condition is that an entity qualifying for the grant shall purchase, construct or other otherwise acquire long-term asset.

Grant Related to Income

This is a government grant other than grant related to asset.

Accounting for Government Grant

Government grant shall be recognized as income on a systematic basis over the periods in which an entity recognizes as expenses the related costs for which the grant is intended to compensate.

Accounting for Government Grant

Grant is taken to income over one or more periods in which the related cost is incurred.

Grant in Recognition of Specific Expenses

A grant that shall be recognized as income over the period of the related expenses.

Grant Related to Depreciable Asset

A grant that shall be recognized as income over the periods and in proportion to the depreciation of the related asset.

Grant Related to Nondepreciable Asset Requiring Fulfillment of Certain Conditions

A grant that shall be recognized as income over the periods which bear the cost of meeting the conditions.

Grant that Becomes Receivable as Compensation for Expenses or Losses Already Incurred or For the Purpose of Giving Immediate Financial Support with No Related Costs

A grant that shall be recognized as income of the period in which it becomes receivable.

Government Grant Related to Asset

Shall be presented in the statement of financial position in either of two ways:

a. By setting the grant as deferred income.

b. By deducting the grant from the cost of the asset.

Government Grant Related to Income

Is presented in the income statement, either separately or under the general heading "other income" or deducted from the related expense.

Repayment of Government Grant

A government grant that becomes repayable because of noncompliance with conditions. It shall be accounted for as a change in accounting estimate.

Repayment of a Grant Related to Income

Shall be applied first against any unamortized deferred income and any excess shall be recognized immediately as an expense.

Repayment of a Grant Related to an Asset

Shall be recorded by increasing the carrying amount of the asset. The cumulative depreciation that would have been recognized to date in the absence of the grant shall be recognized immediately as an expense.

Grant of Interest-Free Loan

Is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan.

Grant of Interest-Free Loan

This is the benefit of a government loan with a nil or below-market rate of interest.

Grant of Interest-Free Loan

The benefit is measured as the difference between the face amount and the present value of the loan.

Grant Income on Interest-Free Loan

Is equal to the annual amortization of the discount on note payable.

Government Assistance

Is action by government designed to provide an economic benefit specific to an entity or range of entities qualifying under certain criteria.

Government Assistance

The essence of it is that no value can reasonably be placed upon it. It does not, however, include indirect benefits or benefits not specific to an entity.

The accounting policy adopted for government grant, including the method of presentation adopted in the financial statements.

One of the disclosures needed for government grant.

The nature and extent of government grant recognized in the financial statements and an indication of other forms of government assistance from which the entity has directly benefited.

One of the disclosures needed for government grant.

Unfulfilled conditions and other contingencies attaching to government assistance that have been recognized.

One of the disclosures needed for government grant.

True

(True or False) It is not required to disclose the name of the government entity that gave the grant along with the date of sanction of the grant by such agency and the date when cash was received in cash of monetary grant.