The Board reaffirmed its earlier decision to replace IAS 20 Accounting for Government Grants and Disclosure of Government Assistance.
The Board previously considered various options for replacing the Standard, including adopting accounting models at present prescribed by pronouncements of other standardsetting bodies. However, in the light of the ongoing work on revenue recognition, the Board decided that it would be premature to specify a new model. It also agreed that withdrawing IAS 20 would leave constituents with insufficient guidance. Therefore, the Board tentatively decided to amend IAS 20 by adopting the accounting model for government grants contained in IAS 41 Agriculture. This model currently applies only to biological assets measured at fair value less estimated point-of-sale costs.
The Board noted that this would mean replacing the recognition requirements of IAS 20 with the principles from IAS 41 paragraphs 34-36. This would result in an unconditional grant being recognised as income when the grant becomes receivable and a conditional grant being recognised as income when the conditions attaching to the government grant are met.
The Board directed the staff to draft the amendments to IAS 20 for its consideration at a future meeting.