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• Does not apply to not-for-profit entities.
 

• Does not deal with:
  • Government assistance provided in the form of benefits used in determining taxable income or are determined or limited on the basis of income tax liability (such as accelerated depreciation allowances).
  • Government participation in the ownership of the entity
  • Government grants covered by AASB 141 Agriculture.

• Initial recognition of government grants (including non-monetary grants at fair value) cannot occur until there is reasonable assurance that:
  • the entity will comply with the conditions attached to the grants, and
  • the grants will be received.
• Government grants must be recognised as income over the periods necessary to match them with the related costs they are intended to compensate on a systematic basis.
• Government grants receivable as compensation for expenses or losses already incurred or for the purpose of providing immediate financial support must be recognised as income in the period they become receivable.
• Grants related to assets (including non-monetary grants at fair value) must be presented in the balance sheet by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset.
• Grants related to income can be presented as a credit in the income statement or they are deducted in reporting the related expense.
• A government grant that becomes repayable is accounted for prospectively as a revision to an accounting estimate under AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors with the additional requirements:
  • For a grant related to income, firstly apply against any unamortised deferred credit, then recognise immediately as an expense.
  • For a grant related to assets, either increase the carrying amount of the asset or reduce the deferred income balance. The cumulative additional depreciation that would have been recognised to date as an expense in the absence of the grant is recognised as an expense immediately.

• Loans at nil or low interest rates are a form of government assistance, but the benefit is not quantified by the imputation of interest.
• Government assistance does not include the provision of infrastructure by improvement to the general transport and communication network and the supply of improved facilities such as irrigation which is available on an ongoing indeterminate basis for the benefit of an entire community.

• Accounting policy adopted for government grants.
• Nature and extent of government grants recognised in the financial statements, and an indication of other forms of government assistance.
• Unfulfilled conditions and other contingencies attached to the government assistance recognised.