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CA Final · Financial Reporting · Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance

Aarav Pharma Ltd's finance team notes that the Indian standard on government grants contains no requirements for presenting grants related to income in a separate income statement, unlike the corresponding international standard. What is the reason given in the comparison with IAS 20?

The requirements were deleted because Ind AS 1 removed the two-statement option. Ind AS 1 requires components of profit or loss and other comprehensive income to be shown in a single statement of profit and loss, so a separate income statement for grants does not arise.

  1. AGrants related to income are always deducted from related expenses in Indian practice
  2. BInd AS 1 removed the option of a two-statement approach, so components of profit or loss and other comprehensive income are presented within the statement of profit and lossCorrect
  3. CSeparate income statements are presented only by listed entities in India
  4. DGrants related to income are required to be taken directly to reserves

Explanation

The comparison states that the requirements on a separate income statement were deleted as a consequence of removing the two-statement option in Ind AS 1. Ind AS 1 requires profit or loss and OCI components to be presented as part of the statement of profit and loss. Paragraph number 29A was retained only to keep numbering consistent with IAS 20.

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