alleryStart learning →Which argument supports the income approach to grants?
AGrants are earned through compliance
BGrants are funds from shareholders
CGrants are a financing device only
DGrants carry no related costs at all
Answer & Solution
Correct answer: A. Grants are earned through compliance
The income approach holds that entities earn grants by complying with conditions, so they belong in profit or loss.
Keep practising Ind AS 20 Government Grants and Ind AS 41 Agriculture
Browse all Ind AS 20 Government Grants and Ind AS 41 Agriculture questions for CA Final, or explore more Financialreporting topics.
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?