Grants

IAS 20 applies to the accounting for and disclosure of:

• Government grants and certain forms of government assistance.
• Only government grants
• Tax credits only
• All of the above

Government grants are recognised in the financial statements when:

• There is a reaosnable assurance that the entity will comply with the conditions attached to the grant
• The grant is received in cash
• The grant is promised by the government
• The grant is used for its intended purpose

Government grants related to income are recognized:

• Over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate.
• When received
• When the grant conditions are fulfilled
• In the period the grant is received

Government grant related to assets are recognozed:

• Immediately in profit or loss
• Over the useful life of the asset
• As a reduction of the carrying amount of the asset
• Either as a deferred income or by deducting the grant from the asset's carrying amount

A government grant becomes repayable and is treated as a change in accounting estimate. How should it be accounted for?

• As an adjustment to prior period profits
• As an expense in the period the repayment becomes probable
• As a reduction of future grants
• By increasing the carrying amount of the asset to which it relates

If a government grant is received for the purpose of acquiring a non monetary asset, it can be presented:

• At fair value or nominal amount
• At nominal amount only
• At fair value only
• As income immediately

Government assistance that does not involve transfer of resources to the entity is:

• Recognised as a grant
• Disclosed only
• Not recognised in the financial statements
• Deferred until the assistance is received

Which of the following disclosures is required for government grants?

• The nature and extent of government grants recognised in the financial statements
• The unfulfilled conditions and other contingencies attaching to recognized grants
• Accounting policy adopted for government grants
• All of the above

Repayment of a government grant related to income is recognized:

• As a reduction of income
• As an expense
• By adjusting the carrying amount of asset
• As a prior period adjustment

When should the government grant be recognized in the financial statements?

• When there is no longer any uncertainity regarding the receipt of the grant
• When there is reasonable assurance that the entity will comply with the conditions and the grant will be received
• When the grant is received
• At the end of the financial year