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Government Grants
| SME Par. | IFRS SME | U.S. GAAP |
|---|---|---|
| Scope of this section | ||
| 24.1 | This section specifies the accounting for all government grants. A government grant is assistance by government in the form of a transfer of resources to an entity in return for past or future compliance with specified conditions relating to the operating activities of the entity. | U.S. GAAP does not define government grants, nor are there specific standards applicable to transfers of assets from governmental units to business enterprises. |
| 24.2 | Government grants exclude those forms of government assistance that cannot reasonably have a value placed upon them and transactions with government that cannot be distinguished from the normal trading transactions of the entity. | See 24.1. |
| 24.3 | This section does not cover government assistance that is provided for an entity in the form of benefits that are available in determining taxable profit or tax loss, or are determined or limited on the basis of income tax liability. Examples of such benefits are income tax holidays, investment tax credits, accelerated depreciation allowances and reduced income tax rates. Section 29 Income Tax covers accounting for taxes based on income. | See 24.1. |
| Recognition and measurement | ||
| 24.4 | An entity shall recognise government grants as follows:
|
Although business enterprises are permitted to follow the same approach as under IFRS SMEs, there is no specific requirement for them to do so. Generally the same for not-for-profit organizations. However, promises to give are recognized in the period in which the promises are made., which may differ from IFRS SMEs, depending on how 24.4(a) is interpreted. |
| 24.5 | An entity shall measure grants at the fair value of the asset received or receivable. | For not-for-profit organizations, contributions received are initially measured at fair value, like IFRS SMEs. |
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