Septiembre 2011

Grants, donations and legacies received

Grants, donations and legacies received

Granted by third parties other than shareholders or owners

Recognition
Non-refundable grants, donations and legacies are accounted for as income directly in equity and are systematically recognised in profit or loss on the basis of their purpose in order to match them with the related costs which they are intended to compensate.

Refundable grants, donations and legacies received are recognised as liabilities of the company until they become non-refundable.

Measurement

They are initially recognised at the fair value of the monetary amount received or the asset granted.

Methods of allocation to income

Non-refundable grants, donations and legacies are taken to income on the basis of the purpose for which they were granted. Thus, those:

• 
  Granted to ensure a minimum level of profitability or to compensate for losses from operations: are recognised as income in the year in which they are granted, unless their purpose is to finance losses from operations in future years, in which case they are allocated to income in those years.
  

Grants, donations and legacies received

• 
  Granted to finance specific expenses: are recognised as income in the same year in which the expenses they are financing are incurred.
  

• 
  Granted to acquire assets or settle liabilities:
  

• 
  Intangible assets, property, plant and equipment and investment property: in proportion to the period depreciation or amortisation taken.
  

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  Financial assets and inventories: on disposal of the asset, on the recognition of an impairment loss or on derecognition.
  

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  Repayment of debts: on repayment of the debt or on the basis of the item financed.
  

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  Granted for no specific purpose: in the year in which they are recognised.
  

Granted by shareholders or owners

These grants do not constitute income and must be recognised directly in equity.