Presentation of income grants

Learning objectives

• Distinguish presenting a grant related to income as separate income from presenting it as a deduction from the related expense.L1, L2, L3

Normative references

• IAS 20 §29Grants related to income. Current requirement (EU text in force): presented as part of profit or loss, either separately or under a general heading such as 'Other income', or deducted in reporting the related expense. Future requirement (IFRS 18, 1 January 2027): classified and presented in accordance with IFRS 18, included in profit or loss either as income or as a deduction from the related expense.

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

3 questions

• A grant related to income may be presented in profit or loss either as a separate line or under a heading such as "other income", or as a deduction from the related expense.L1
• Navarre has recognised EUR 120,000 of training costs. It receives {grant_amount} under a grant that compensates these costs, and its policy is to present income grants as a deduction from the related expense. Case convention: the grant relates entirely to the current year. Record the entry.L2
• Roussel is awarded {grant_amount} to compensate subcontracting expenses expected to total {total_costs}. During the year it recognises {period_costs} of these expenses. Case conventions: allocation in proportion to the expenses, and presentation of the grant as a deduction from the related expense. Calculate the grant matched to the year, then the net expense presented.L3