CAF-1 · Chapter 1 · Question 9 of 15
Alpha Ltd received government assistance in the form of a general improvement to the water supply network in its industrial area. How is this treated under IAS 20?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Ignored, as it is an action affecting general trading conditions.
Explanation
Benefits provided indirectly through actions affecting general trading conditions, such as infrastructure provision, are excluded from government grants.
More IAS 20 Government Assistance and Grants MCQs
- Q11According to IAS 20, government grants shall not be recognized until there is reasonable assurance that:
- Q12Which of the following bodies is considered 'Government' under IAS 20?
- Q13Beta Corp receives free marketing advice from a government export agency. How is this accounted for?
- Q14How should an entity present a government grant related to income in the statement of profit or loss?
- Q15When a grant related to an asset becomes repayable, what happens to the cumulative additional depreciation that would have been recognized…