SIC 10 was adopted by the European Commission by Regulation (1126/2008/EC).
Accounting policies, changes in accounting estimates and errors
Accounting for government grants and disclosure of government assistance
1.In some countries government assistance to entities may be aimed at encouragement or long-term support of business activities either in certain regions or industry sectors. Conditions to receive such assistance may not be specifically related to the operating activities of the entity. Examples of such assistance are transfers of resources by governments to entities which:
operate in a particular industry;
continue operating in recently privatised industries; or
start or continue to run their business in underdeveloped areas.
2.The issue is whether such government assistance is a ‘government grant’ within the scope of IAS 20 and, therefore, should be accounted for in accordance with this standard.
3.Government assistance to entities meets the definition of government grants in IAS 20, even if there are no conditions specifically relating to the operating activities of the entity other than the requirement to operate in certain regions or industry sectors. Such grants shall therefore not be credited directly to shareholders’ interests.
This interpretation becomes effective on 1 August 1998. Changes in accounting policies shall be accounted for in accordance with IAS 8.