alleryStart learning →A forgivable loan is a grant if reasonable assurance exists that the entity will:
ARepay it before time
BPay market interest
CRaise fresh equity
DMeet forgiveness terms
Answer & Solution
Correct answer: D. Meet forgiveness terms
A forgivable loan becomes a grant once the entity is reasonably sure to satisfy the conditions for waiver of repayment.
Keep practising Ind AS 20 Government Grants and Ind AS 41 Agriculture
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Related questions
When valuing a below-market government loan benefit, what must the entity consider?Why do income approach supporters reject crediting grants directly to equity?Which view backs the income approach as per Ind AS 20?How many broad approaches to accounting for government grants does Ind AS 20 describe?Why is information on government assistance useful to financial statement users?Why does government typically give grants according to Ind AS 20?Which grape-related step is outside Ind AS 41?Which activity is listed as agricultural activity in Ind AS 41?