Government Grants and Donor Assistance (Section 24 / IAS 20)

Overview

Section 24 (IFRS for SMEs) provides two methods, electable by entity policy: the performance model (recognise income when performance conditions are met or when no conditions exist) and the accrual model (deferred income released to P&L as related expenses are incurred or assets are depreciated).

IAS 20 (full IFRS) follows the accrual model and a related-asset / related-income split, with the option of presenting grants related to assets gross (as deferred income) or net (deducted from the asset).

Both standards distinguish:

• Unconditional grants (recognised when receivable).
• Conditional grants (recognised when conditions are met).
• Repayable assistance (treated as liability until repayment terms are met).

Required first reads