The accounting for government grants is an area where we might expect to see considerable variation in financial statements. Some companies might receive a single one-off grant for a short project; for others, government grants are integral to their operations and form a proper part of their business planning. When we look at the range of choices, we can see how important it is to understand properly what each separate GAAP actually says.

Old UK GAAP

Under SSAP 4, Accounting for Government Grants, there is only one model for accounting for grants. This is based on the accruals concept; in a nutshell this requires that grants are matched with the expenditure to which they relate.