Disclosure

1. In addition to those disclosures required by paragraphs 24, 25 and 30, the following matters shall be disclosed:

   1. the accounting policy adopted for government grants, including the methods of presentation adopted in the financial statements;

   2. the nature and extent of government grants recognised in the financial statements and an indication of other forms of government assistance from which the entity has directly benefited; and

   3. unfulfilled conditions and other contingencies attaching to government assistance that has been recognised.

Transitional Provisions

1. An entity adopting the Standard for the first time shall:

   1. comply with the disclosure requirements, where appropriate; and

   2. either:

      1. adjust its financial statements for the change in accounting policy in accordance with FRS 108₂₀₀₄, Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies; or

      2. apply the accounting provisions of the Standard only to grants or portions of grants becoming receivable or repayable after the effective date of the Standard.

Effective Date

1. This Financial Reporting Standard becomes operative for annual financial statements covering periods beginning on or after 1 January 2004.

Appendix 1

Compliance with International Accounting Standards

As at the date of issue of this Standard, compliance with this Standard will ensure conformity in all material respects with International Accounting standards IAS 20 (reformatted 1994) Accounting for Government Grants and disclosure of Government Assistance except for:

1. IAS 20 states that it is usual for an enterprise to assess and account both the non-monetary government grant and asset at fair value, or as an alternative, nominal value is sometimes used. This Financial Reporting Standard prescribes that it is usual for an entity to assess the fair value of the non-monetary government grant and to account for both grant and asset at that fair value.

2. IAS 20 allows grant relating to assets to be presented in the balance sheet either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the assets. This Financial Reporting Standards requires additional disclosure if grant relating to assets is presented by deducting the grant in arriving at the carrying amount of the assets.

3. IAS 20 allows grant relating to income to be presented as a credit in the income statement or alternatively they are deducted in reporting the related expense. This Financial Reporting Standards requires additional disclosure and reason why the alternative approach is adopted.

4. This Financial Reporting Standard uses the word "revocation" of government grant instead of "repayment" of government grant as used in IAS 20. This Standard provides explanation that in circumstances where a grant is revoked by government, such revocation may require an entity to make good the grant by transferring its resources in various forms.

Page | 1 2