10 Questions
How can a government grant related to an asset be presented in the statement of financial position?
Either by setting the grant as deferred income or by deducting the grant from the carrying amount of the asset
What is a government grant?
Assistance by government in the form of transfer of resources to an entity
What is the presentation of government grant related to income in the income statement?
It is presented as a separate revenue or under other income
When can a government grant be recognized?
When there is reasonable assurance that the entity will comply with the conditions of the grant and the grant will be received
What is not included in government assistance?
Infrastructure in development areas
How should a government grant be accounted for?
As income on a systematic basis over the periods in which the related costs are incurred
How should a government grant related to a non-depreciable asset be recognized?
As income over the periods which bear the cost of meeting the conditions
What is the purpose of government assistance?
To provide an economic benefit specific to any entity or range of entities qualifying under certain circumstances
What is required to be disclosed about government grants?
Both the accounting policy adopted and the nature and extent of government grants recognized
How should a government grant received as compensation for expenses or losses already incurred be recognized?
As income in the period it is received
This quiz covers the concept of government grants, including the definition, recognition criteria, and classifications. It also explores the conditions attached to government grants and their impact on an entity's operating activities.
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