SIC-10 — Government Assistance – No Specific Relation to Operating Activities
- IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
- Issued July 1998.
- Effective date: 1 August 1998.
Summary of SIC-10
In some countries, government assistance to enterprises can 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 enterprise, e.g. operating in a particular industry, continuing to operate or running a business in underdeveloped areas. The issue is whether such government assistance is "a government grant" within the scope of IAS 20 and should therefore be accounted for in accordance with that Standard.
Under SIC-10, government assistance to enterprises that is aimed at encouragement or long-term support of business activities either in certain regions or industry sectors meets the definition of government grants in IAS 20. Such grants should therefore not be credited directly to shareholders' interests.