Should I use AASB 120 Accounting for Government Grants and Disclosure of Government Assistance?

Our Financial Reporting Template expert content provider & AASB member, Carmen Ridley explains who can legitimately use AASB 120 and why.

We have an accounting standard AASB 120 Accounting for Government Grants and Disclosure of Government Assistance but there seems to be some confusion over who can use this standard and I have received a number of questions about this.

Many entities have looked in AASB 120 and since it no longer refers to ‘applicability only by for-profit entities’ they have assumed that all entities can now use it, however, this is not the case.

Whilst the application paragraphs are no longer in the standards that doesn’t mean it is a ‘free-for-all’ on standards – AASB 1057 Application of Australian Accounting Standards contains all the application paragraphs for all accounting standards and this needs to be checked when considering which entities are able / required to use a particular standard.

With regard to AASB 120, the relevant application paragraphs (from AASB 1057) are:

In conclusion, therefore AASB 120 is applicable to for-profit entities only.  Not-for-profit entities will use AASB 1004 Contributions until annual reporting periods beginning on or after 1 January 2019 and AASB 1058 Income of NFP Entities after that date.

Any questions, please contact Carmen Ridley on