Matching to the costs compensated

Learning objectives

• Determine the periods to which a grant is matched with the costs it is intended to compensate.L2, L3

Normative references

• IAS 20 §12Income approach: the grant is recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grant is intended to compensate.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• Four statements concern the matching of an income grant with the costs it compensates. Which one is wrong?L2
• Tessier receives {grant_amount} to compensate staff costs expected to total {total_costs}. It recognises {costs_year1} of these costs in year 1 and {costs_year2} in year 2. Case convention: the grant is matched in proportion to the compensated costs recognised. Calculate the grant matched to each year.L3
• Bellanger is awarded {grant_amount} to compensate staff costs expected to total {total_costs}. During the year it recognises {period_costs} of these costs. Case conventions: the grant is matched in proportion to the compensated costs recognised, and it is paid at the end of the programme (a receivable at this stage). Record the entry for the year.L3