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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. 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 this 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.
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