23. Deferred income and government grants

ACCOUNTING POLICIES

Deferred income and government grants

Deferred income is recognised in accordance with the prudence principle and matching principle. Deferred income comprises:

• cash obtained to finance the acquisition or production of property, plant and equipment and intangible assets. It is accounted for by gradually increasing other operating income by the amount corresponding to depreciation/amortisation charges on these assets in the part financed by the said cash. This applies in particular to partially or fully cancelled loans and credits and grants for the purchase of property, plant and equipment, as well as subsidies for development work or purchase of intangible assets,
• property, plant and equipment and intangible assets received free of charge. It is released to other operating income in parallel with depreciation charges on this property, plant and equipment.

Government grants are recognised when there is reasonable assurance that the subsidy will be received and that the entity will comply with all relevant conditions of the subsidy. If the grant relates to an asset, it is accounted for by gradually increasing other operating income in proportion to depreciation/amortisation charges on these assets.