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CMA Intermediate · Financial Accounting · Accounting for Government Grants (AS 12)

Which of the following is covered by the term 'government' as used in AS 12?

AS 12 defines government as government, government agencies and similar bodies, whether local, national or international. So grants from a municipal authority or an international body count as government grants, and the definition is not limited to the central government or to majority-owned entities.

  1. AOnly the central government of India
  2. BOnly the central and state governments, not their agencies
  3. CA local municipal body or an international agency, as well as government agencies and similar bodiesCorrect
  4. DOnly bodies in which government holds more than 50% of equity

Explanation

AS 12 says government refers to government, government agencies and similar bodies, whether local, national or international. A municipal body or an international body therefore qualifies. The other options restrict the definition unduly.

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