IAS 20 – Government Grants

Government grants are assistance by government in the forms of transfers  of resources in return for past or future compliance with conditions relating to an enterprise’s operating activities.

Government assistance is action by government design to provide benefits;


  • Free technical or marketing advice.
  • Provision of guarantees.
  • Loans at zero or low interests.

*If necessary disclosure should be made.


A government grant should not be recognized unless there is a reasonable assurance;

  • Enterprise will comply with the relevant conditions attaching to the grant.
  • The grant will be received.

Government grants should be recognized as income over the periods necessary to match them with the related cost that they are intended to compensate. They should not be credited directly to equity.


About Jonathan Ruiz CPA

Entrepreneur, CPA Mentor, Stock market Newbie Mentor, Influential Author and Master's Degree in International Business graduate in Hult International Business School, UK. A father of two lovely daughters.
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