CAF-1 · Chapter 1 · Question 5 of 15
Under IAS 20, a forgivable loan from the government is treated as a government grant when:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) There is reasonable assurance that the entity will meet the terms for forgiveness of the loan.
Explanation
A forgivable loan from the government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan.
More IAS 20 Government Assistance and Grants MCQs
- Q7If an entity receives a grant related to an asset and accounts for it by deducting the grant from the asset's carrying amount, how is the…
- Q8Which of the following is NOT required to be disclosed under IAS 20?
- Q9Alpha Ltd received government assistance in the form of a general improvement to the water supply network in its industrial area. How is…
- Q10A government grant that becomes receivable as compensation for expenses or losses already incurred, with no future related costs, should be:
- Q11According to IAS 20, government grants shall not be recognized until there is reasonable assurance that: