Government Grants — IAS 20 vs US GAAP

Another structural gap: IFRS has a comprehensive recognition standard (IAS 20); US GAAP does not. US business entities analogize (often to IAS 20 itself, or to grant/contribution guidance) and disclose government assistance under ASC 832.

Area	US GAAP	IFRS (IAS 20)
Recognition standard	None for business entities — analogize; ASC 832 requires disclosure	IAS 20 — recognize in P&L over the periods matching the related costs
Practice	Diverse (income vs cost-reduction)	Prescribed income approach
Asset-related grants	Varies	Deferred income or netted against the asset’s carrying amount

Because US GAAP has no recognition model, practice varies and is driven by the analogy chosen — IAS 20 prescribes the approach.

• Which model to analogize to (US) — IAS 20, ASC 958-605, or other.
• Recognition timing — matching grants to the costs they compensate.
• Presentation — gross (deferred income) vs net (against the asset/expense).
• ASC 832 disclosure scope (US).

• SAP implementation: grant postings as deferred income or as a reduction of the asset (AuC / FI-AA netting); disclosure tracking for ASC 832. Write-up forthcoming under SAP & Enterprise Systems.

An educational reference and original synthesis — not investment advice, and not a substitute for the standard or for professional accounting guidance. For authoritative measurement detail, consult IAS 20 / ASC 832 directly.