Introduction, revenue and capital grants
You'll learn how government grants are accounted for under IAS 20, the key standard for recognising and presenting grants in financial statements.
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In this lesson
- 0:00 Session 16: Government grants overview
- 0:16 IAS 20 definitions and key concepts
- 1:03 Grants related to assets versus income
- 2:17 Two main accounting principles explained
- 3:11 Revenue grants: Basic principles
- 4:01 Revenue grants: Presentation methods
- 5:04 Revenue grants worked example
- 7:23 Capital grants: Recognition methods
- 8:29 Capital grants: Method one versus method two
- 9:21 Capital grants: Repayment and provisions
- 11:04 Capital grants worked example
About this lesson
This session covers the two main types of grants—revenue grants (for operating activities) and capital grants (for purchasing non-current assets)—and explains the matching principle that determines how each should be spread across periods. You'll discover the two methods for recognising capital grants, how to present them in the profit and loss and statement of financial position, and what happens if a grant needs to be repaid due to non-compliance with conditions. By working through practical examples, you'll understand why the treatment differs between grant types and how to apply IAS 20 correctly in your exam and professional work.
Duration: 14m
Transcript
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