Hurina Nataliia, Candidate of Economic Sciences, Associate Professor, Associate Professor of the Department of Accounting and Auditing, State Tax University, Irpin, Ukraine

ORCID ID: 0000-0001-9433-069X
e-mail: g-nataliya@ukr.net

Sakhno Oksana, First (Bachelor’s) degree student, Faculty of Taxation, Accounting and Auditing, State Tax University, Irpin, Ukraine

ORCID ID: 0000-0002-7950-6957
e-mail: okksana.sakkhno@gmail.com

Reflection of Government Grants in Accounting

Abstract. Introduction. Given the growing role of targeted funding in post-war reconstruction, this article provides a comprehensive analysis of approaches to accounting for government grants in Ukraine. The study is based on current accounting standards and practical cases of grant resource use. This allows us to trace the differences between formal regulations and donors’ actual requirements. Particular attention is paid to comparing national provisions with IAS 20, “Accounting for Government Grants and Disclosure of Government Assistance,” revealing significant methodological differences in the interpretation of income recognition, “reasonable assurance” criteria, and information disclosure in reporting.

Purpose. This study highlights key challenges in practical accounting, from determining the initial value of assets and distributing co-financing to organizing analytical accounting for projects. Typical accounting procedures for grants that finance current expenses and the acquisition of non-current assets are summarized, along with examples of how these procedures are reflected in accounting entries. Approaches to determining the initial value of objects created with mixed financing and their impact on depreciation policy are systematized.

Results. Elements of accounting policy focused on grant programmes have been proposed: separate analytical accounting for projects, digital registers of primary documents, and control algorithms for allocating targeted funding amounts to the income of reporting periods. A separate section is devoted to the tax aspects of grants. This section analyzes the mechanisms for forming financial results and tax differences, the specifics of determining VAT based on the type of assistance received, and the conditions for the emergence of tax liabilities and tax credit criteria. A reconciliation scheme has been developed to reduce the risk of double impact on the tax base. 

Conclusions. It has been proven that the main challenges are unifying approaches to assessing and reflecting grants, harmonizing national and international standards, and improving accountants’ readiness to work with grant resources. Proposed areas for methodological improvement range from regulatory integration to digitizing accounting processes and introducing electronic compliance tools. The practical significance of these results is the formation of a comprehensive model for accounting for grants. This model ensures transparent financial reporting, strengthens donor confidence, and promotes the effective use of financial resources in Ukraine’s economic modernization and recovery processes.

Keywords: accounting; state grant; targeted financing; income; Tax Code of Ukraine; debit; credit.

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