The defined terms

Learning objectives

• Identify a government grant and distinguish it from government assistance and from a repayable loan, using the facts of the case.L1, L2, L3

Normative references

• IAS 20 §3Definitions: government grant, government assistance, grants related to assets, grants related to income, forgivable loans (loans whose repayment the lender undertakes to waive under certain prescribed conditions), fair value (by reference to IFRS 13).

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

2 questions

• A public authority pays EUR 80,000 to an entity on condition that it acquires and operates a production machine. How does IAS 20 describe this grant?L1
• A regional agency hands over EUR 300,000 to Orvane. The contract states that the agency will waive repayment if the entity keeps 40 jobs on the site for three years, and that any amount not waived will be repaid with interest. Which qualification from the definitions of IAS 20 fits this payment?L3