Hyperinflationary economies are those in which prices of goods and services rise

uncontrollably and rapidly. This typically occurs when a country's government begins printing
money excessively, leading to a sharp devaluation of the currency. Hyperinflation erodes the
purchasing power of the currency, causing prices to skyrocket, often on a daily or even hourly
basis.

Government grants are assistance received from the government in the form of transfers of
resources in exchange for compliance with certain conditions

Government Grants:

Purpose: Government grants are typically provided to support specific projects, activities, or initiatives
that align with the government's objectives or priorities. These projects may include research,
development, infrastructure improvements, education, or community services.

Application Process: Organizations, businesses, institutions, or individuals often need to apply for
government grants through a competitive or non-competitive process. Applications usually require
detailed proposals outlining the purpose, objectives, budget, and expected outcomes of the project.

Requirements: Government grants often come with specific requirements and conditions that recipients
must adhere to. These conditions may include reporting on the use of funds, achieving certain
milestones, or meeting predetermined objectives.

Examples: Research grants, infrastructure development grants, education grants, arts and culture grants,
small business grants.

Government Assistance:

Purpose: Government assistance, also known as social welfare or social assistance, is provided to
individuals or families facing financial hardship or other challenges. The aim is to support basic needs
such as food, housing, healthcare, and education, and to alleviate poverty or improve the quality of life
for vulnerable populations.

Eligibility: Government assistance programs often have eligibility criteria based on factors such as
income level, family size, disability status, age, or employment status. Individuals or families in need
must meet these criteria to receive assistance.

Types: Government assistance can take various forms, including cash transfers (such as welfare
payments or unemployment benefits), food assistance programs (such as food stamps or school meal
programs), housing assistance (such as rental subsidies or public housing), healthcare assistance (such as
Medicaid or subsidized health insurance), and educational assistance (such as scholarships or student
loans).

Application Process: The process for accessing government assistance varies depending on the program,
but it often involves submitting applications or documentation to demonstrate eligibility.

In summary, government grants are typically provided to support specific projects or initiatives, while
government assistance is aimed at providing support to individuals or families facing financial
hardship or other challenges. Both forms of support play important roles in addressing societal needs
and promoting public welfare.

The items listed—tax benefits, free technical or marketing advice, provision of guarantees, and
government procurement policies—are indeed forms of government assistance, but they are not
considered government grants for various reasons:

Tax Benefits: Tax benefits are deductions, credits, or exemptions provided by the government to
individuals or businesses, reducing their tax liability. While they provide financial relief, they are not
considered grants because they don't involve direct disbursement of funds from the government to the
recipient.

Free Technical or Marketing Advice: This assistance involves the provision of expertise or consultancy
services by the government to help individuals or businesses improve their technical or marketing
strategies. It's not a grant because it doesn't involve the transfer of money from the government to the
recipient but rather the provision of services.

Provision of Guarantees: Government guarantees involve assurances provided by the government to

lenders or investors to mitigate risks associated with loans or investments. Although they provide
financial security, they are not grants because they don't involve direct funding from the government to
the recipient; rather, they provide assurance to third parties.

Government Procurement Policy: This policy entails preferential treatment given to certain entities in
government procurement processes, such as setting aside a portion of contracts for small businesses or
minority-owned businesses. While it can boost sales for eligible entities, it's not considered a grant
because it involves contractual arrangements rather than direct financial assistance.

In summary, while these forms of government assistance provide various benefits to individuals or
businesses, they differ from government grants in terms of the mechanism of support and the nature of
the assistance provided. Grants typically involve direct monetary transfers from the government to the
recipient for specific purposes, whereas the listed forms of assistance involve other types of support
such as tax relief, services, guarantees, or preferential treatment in procurement processes.

Government grants are recognized in profit or loss on a systematic basis over the
periods in which the entity recognizes as expenses the related costs for which the
grants are intended to compensate

It's significant , these are disclosed but not recognized as government grants.

The following are not government assistance and therefore are neither disclosed nor recognized.

a) Public improvements that benefit the entire community

b) Imposition of trading constraints on competitors

PAS20 provides the following reasons why the receipt of government assistance may be significant in
the preparation of the financial statements:
1. If resources are received, an appropriate accounting method is necessary to account for the
receipt; and
2. The indication of the extent to which the entity has benefited from the assistance during the
period improves the comparability of its financial statements.

Government grants are

recognized in profit or
loss on a systematic
basis over the
periods in which the
entity recognizes as
expenses the related
costs for which the
grants are intended to
compensate.
Government grants are
recognized in profit or
loss on a systematic
basis over the
periods in which the
entity recognizes as
expenses the related
costs for which the
grants are intended to
compensate.
Government grants are
recognized in profit or
loss on a systematic
basis over the
periods in which the
entity recognizes as
expenses the related
costs for which the
grants are intended to
compensate.
Government grants are
recognized in profit or
loss on a systematic
basis over the
periods in which the
entity recognizes as
expenses the related
costs for which the
grants are intended to
compensate.
Government grants are
recognized in profit or
loss on a systematic
basis over the
periods in which the
entity recognizes as
expenses the related
costs for which the
grants are intended to
compensate.
RECOGNITION;

Government grants are recognized in profit or loss on a systematic basis over the periods in which the
entity recognizes as expenses the related costs for which the grants are intended to compensate.

Grants related to assets often focus on supporting individuals, organizations, or

communities in building or acquiring tangible assets such as property, equipment,
or infrastructure. These grants can be instrumental in promoting economic
development, improving access to essential services, or fostering innovation.
Grants related to income typically aim to support individuals or families with
limited financial resources, often targeting specific needs such as education,
healthcare, housing, or entrepreneurship.
 A forgivable loan is measure at the carrying amount of the loan forgivable
  The benefit of a loan at below-market rate of interest or zero interest
is measured as the difference between the initial carrying amount of the loan
determined in accordance with PRFS9 financial instrument and the proceeds
received.

Recognizing government grants in profit or loss on a receipts basis (e.g.,

cash basis) is prohibited as it violates the accrual basis of accounting. A
receipts basis would only be acceptable if there is no allocation basis
other than the one in which the grant was received.
ILLUSTRATION #1
Notice that even on January 1, 20x2 when the equipment is actually acquired, no
income from the government grant is yet recognized. This is because the cost of the
equipment is not expensed but rather capitalized as PPE.
Grants related to depreciable assets are recognized in profit or loss in the
proportions in which depreciation expense on those assets is recognized.
Thus, in the illustration above, since depreciation expense is computed using the
straight-line method, income from government grant is also computed using the
straight-line method. If in case depreciation expense is computed using some other
method, income from government grant will also be computed using that other
method.
Illustration 2: Grant received as compensation for losses incurred A recent typhoon
caused #40M in damages to Entity A's properties. Accordingly, the government
gave Entity A a financial aid of P10M.
Accounting: The P10M grant is recognized immediately in profit or loss because the
losses for which the grant is intended to compensate were already incurred.

However, in the statement of cash flows, the cash flows from the receipt of the grant and the purchase
of the related asset are presented separately, even if the entity uses the net presentation above.