How are government grants accounted for under IAS 20?

IAS 20 specifies that government grants must not be recognized until there is reasonable assurance that the entity will comply with the conditions attached to them and the grants will be received. They are recognized in profit or loss on a systematic basis over the periods in which the entity recognizes the related costs.

• Capital Grants: Presented either as deferred income or by deducting the grant from the carrying amount of the asset.
• Revenue Grants: Credited directly to profit or loss under a general heading or deducted from the related expense.