Manual - ICDS VII : Government Grants

In this circumstance, a government grant is awarded for giving immediate financial support to an enterprise rather than as an incentive to undertake specific expenditure. Such grants may be confined to an individual enterprise and may not be available to a whole class of enterprises. In such a case, the grantee is considered to have complied with the grant related conditions and has to recognize grant in the period in which such sums become receivable. Actual receipt is immaterial for the purposes of income recognition.

 

Government grant for immediate financial support must be recognised when receivable, irrespective of actual receipt. Government grants given as immediate financial support and not tied to specific expenditure must be recognised when the grantee is entitled and sums become receivable; actual receipt is immaterial. If the grant is confined to an individual enterprise and grant-related conditions are met, recognition occurs in the period of receivability, governing timing of income inclusion and disclosure under the income computation framework.