ACCOUNTING OF GRANTS, SUBSIDIES AND STATE SUPPORT ACCORDING TO IAS 20 AND VAS 21

Abstract

Companies often use state support, grants and subsidies in order to minimize their operational costs and maximize their operational capabilities, meaning, they are intended to cover costs and achieve development goals. The entity receives grants and subsidies only when certain requirements are met, the most important requirement is their purpose. Since grants and subsidies, according to their economic meaning, have the characteristics of both equity (property of the owners) and liabilities, every accounting entity uses the methodological recommendations of  IAS 20 or BAS 21 to help in order to correctly record/book grants, accounting of subsidies and state support and ensuring the legal validity of accounting. The object of the article's research is the 20th IAS and the 21st BAS, and for the research was used analysis and synthesis of scientific literature; their summarization and comparison and analysis of financial statements of companies. After comparing the provisions of the 20th IAS and the 21st BAS, it was found that both methodological tools help and guide every business entity to keep and manage correct accounting, therefore, the application of the 20th IAS and the 21st BAS and alignment with their own interests will help ensure providing high-quality sets of financial statements. After analyzing the financial statements of AB,,ESO” and UAB ,,Alytaus Šilumos Tinklai”, we can notice that the presentation of grants and subsidies in the financial statements of both companies has similarities, but the information on grants and subsidies itself, which is presented in the explanatory note, is different.