MFRS 120- Accounting for Government grant and Disclosure of Government Assistance

According to MFRS 120, Government grant is known as assistant in any kind of transferees

resources to any firm in return for some past or future compliance with certain conditions

relating to the operating a activities of the firm.

In this topic, Government grant may be recognizing when the assistant form of resources

complies with any condition attached to it and the entity actually had received the grand. To treat

this transaction according MFRS 120, we have 2 approaches either CAPITAL APPROACH or

INCOME APPROACH. However, DRB-hicom have use the income method in treat this kind of

transaction. They also used the fair value of the received grant to recognize it1.

(i) Grants relating to assets are included in non-current liabilities as deferred income and is

amortised to profit or loss over the expected useful life of the relevant asset by equal annual

instalment.

(ii) Grants relating to costs are recognised immediately through profit or loss to match them with

the costs incurred.

(iii) Income grants are grants other than the above grants and recognised in the statements of

comprehensive income where there is a

reasonable assurance that the grant will be received and the Group will comply with all attached

conditions.

MFRS 137 - PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS

For this sub topic , we will split to 2 segment : provision and contingent

PROVISION

1 DRB-HICOM Financial statement, page 106