The staff presented two options, namely:
- Amend IAS 20 to reflect the requirements for government grants contained in IAS 41
- Withdraw IAS 20 in its entirety
The staff recommended the second option and that the Basis for Conclusions should state:
- The standard has been withdrawn because it is an impediment to accounting for a government grant in a manner that is consistent with the Framework;
- The withdrawal is a temporary measure, because the Board is addressing the accounting of government grants as part of its revenue recognition project;
- Entities should follow the requirements in paragraphs 10-12 of IAS 8 for developing an accounting policy in the absence of specific requirements.
The Board decided that IAS 20 should be retained. The guidance in the standard on accounting for government grants should be removed and replaced with the guidance from IAS 41. The Board decided the only amendment to the guidance in IAS 41 should be to withdraw the references to assets measured at fair value. The Board agreed in principle that no further amendments should be made until such time as the revenue recognition project is completed.
As a result of the foregoing, the basic principles of IAS 20 would be revised as follows:
- An unconditional grant would be recognised as income when the grant becomes receivable.
- A conditional grant would be recognised as income when the conditions attaching to the government grant are met.