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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II RECOGNITION AND MEASUREMENT CHAPTER III DISCLOSURE CHAPTER I GENERAL PROVISIONS Article 1. For the purpose of regulating the recognition and measurement of government grants, and the disclosure of relevant information, these Standards are formulated in accordance with the Accounting Standards for Enterprises-Basic Standards. Article 2. A government grant refers to the monetary or non-monetary assets obtained by an enterprise from the government, but excluding the capital invested by the government as the owner of the enterprise. Article 3. Government grants are classified into the government grants related to assets and government grants related to income. The government grants related to assets refer to the government assets which are obtained by enterprises for the purposes of purchase or construction, or which form the long-term assets by other ways. The government grants related to income refer to the government grants other than those related to assets. Article 4. The following items shall be governed by other relevant accounting standards: (1) The debt exemptions shall be governed by the Accounting Standards for Enterprises No. 12-Debt Restructuring; and (2) The deductions and exemptions of income tax shall be governed by the Accounting Standards for Enterprises No. 18-Income Tax. CHAPTER II RECOGNITION AND MEASUREMENT Article 5. No government grant may be recognized unless the following conditions are satisfied simultaneously: (1) The enterprise complies with the conditions for the government grant; and (2) The enterprise can receive the government grant. Article 6. If a government grant is a monetary asset, it shall be measured on the basis of the received or receivable amount. If a government grant is a non-monetary asset, it shall be measured at its fair value. If it is unable to obtain its fair value reliably, it shall be measured at its nominated amount. Article 7. The government grants related to assets shall be recognized as deferred income and shall be distributed within the useful lives of the relevant assets and shall be recorded in the current profits and losses. However, the government grants measured at their nominal amounts shall be directly recorded in the current profits and losses. Article 8. The government grants related to the proceeds shall be treated according to the following circumstances, respectively: (1) Those used for compensating the relevant future expenses or losses of the enterprise shall be recognized as deferred income and shall, during the period when the relevant expenses are recognized, recorded in the current profits and losses; (2) Those used for compensating the relevant expenses or losses that have been incurred to the enterprise shall be directly recorded in the current profits and losses. Article 9. If it is necessary to refund any government grant which has been recognized, it shall be treated according to the following circumstances, respectively: (1) If there is any deferred income related to it, it shall offset against the book balance of the deferred income, but the excessive part shall be recorded in the current profits and losses; (2) If there is no deferred income related to the government grant, it shall be directly recorded in the current profits and losses. CHAPTER III DISCLOSURE Article 10. An enterprise shall, in its notes, disclose the following information relevant to the government grants: (1) The type and amount of the government grants; (2) The amount of the government grants which are recorded in the current profits and losses; and (3) The amount of the government grants refunded in the current period as well as the reasons. |
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