Date of issuance: April 2001

Why this SIC was issued?

In some Jurisdiction, in order to support long term business activities and to encourage companies, the government provide assistance. Such assistance may be dependent on specific conditions which may not related to operating activities of entity. Such assistance may be provided for any purpose including

i) To carry on operations in particular industry
ii) To carry on operation in recently/newly privatized industry, or
iii) To start or continue operations in less developed areas

The issue which needs clarification is that should government assistance discussed above be classified and accounted for in accordance with IAS-20 or Not.

Consensus:

This type of assistance meets the definition of government assistance in accordance with IAS 20 even if grant is not dependent of specific conditions relating to operations of company.
Therefore this grant shall not be included in shareholders equity at once.

Effective date: August 1, 1998