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IC Interpretation 110 Government Assistance - No Specific Relation to Operating Activities is set out in paragraph 3. IC Interpretation 110 is accompanied by a Basis for Conclusions. The scope and authority of IC Interpretations are set out in the Preface to this IC Interpretation paragraph 1 and 8-10 of the IFRIC Preface.

In some countries government assistance to entities may be aimed at encouragement or long-term support of business activities either in certain regions or industry sectors. Conditions to receive such assistance may not be specifically related to the operating activities of the entity. Examples of such assistance are transfers of resources by governments to entities which:

The issue is whether such government assistance is a "government grant" within the scope of FRS 120₂₀₀₄ and, therefore, should be accounted for in accordance with this Standard.

Government assistance to entities meets the definition of government grants in FRS 120₂₀₀₄, even if there are no conditions specifically relating to the operating activities of the entity other than the requirement to operate in certain regions or industry sectors. Such grants shall therefore not be credited directly to equity.

FRS 120.03₂₀₀₄ defines government grants as assistance by the government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. The general requirement to operate in certain regions or industry sectors in order to qualify for the government assistance constitutes such a condition in accordance with FRS 120.03₂₀₀₄. Therefore, such assistance falls within the definition of government grants and the requirements of FRS 120₂₀₀₄ apply, in particular paragraphs 12 and 20, which deal with the timing of recognition as income.