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

Tara Cement Ltd has received various forms of government assistance during the year, including grants for which some conditions are not yet fulfilled. Which of the following is a disclosure requirement of Ind AS 20 for the company?

The company must disclose unfulfilled conditions and other contingencies attaching to government assistance that has been recognised. Ind AS 20 also requires the accounting policy adopted, including the presentation method, and the nature and extent of grants recognised. Names of officials and tax rates are not required.

  1. AThe names of government officials who sanctioned each grant
  2. BUnfulfilled conditions and other contingencies attaching to government assistance that has been recognisedCorrect
  3. CThe tax rate applicable to each grant under the Income-tax Act
  4. DOnly the total grant income, without disclosing the accounting policy adopted to present it

Explanation

Ind AS 20 requires disclosure of the accounting policy adopted for grants, including the method of presentation. It also requires disclosure of the nature and extent of grants recognised and of unfulfilled conditions and other contingencies attaching to recognised government assistance. The names of officials and the tax rates are not required. Disclosing only the total, without the policy, falls short of the standard.

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