Non-repayable contributions Support Decree: civil jurisdiction
Non-repayable contributions Support Decree: the reading of some recent publications – with an evidently conflicting opinion on this point – are raising more than a few doubts to those who are dealing with preparation of the financial statements of the companies.
Let’s analyze the relevant legislation together.
The Legislative Decree 22 March 2021, n. 41 – rubricated Urgent measures in the field of support to businesses and economic operators, labor, health and local services, connected to the emergency from COVID-19 – better known as the Sostegni Decree, in its article 1 it provided for the disbursement of a grant to support economic operators and more precisely in paragraph 1:
“In order to support the economic operators affected by the epidemiological emergency “Covid-19”, a non-repayable contribution in favor of subjects with a VAT number, resident or established in the territory of the State, who carry out business activities, art or profession or produce agricultural income”
The rule therefore does not provide for the payment of the contribution “as a relief and / or integration of losses incurred“, But a”support”Economic connected to the event, evidently extraordinary and exceptional as otherwise it could not be for a global health emergency.
I consider this to be important in view of the content of the OIC National Accounting Standard number 12; paragraph 56 letter f) of this principle states that:
“ f) Operating grants
They are due both under the law and under contractual provisions, recognized on an accruals basis e indicated separately in a specific sub-item of item A5.
These must be contributions that have the nature of integration of revenues from the core business o ancillary activities other than financial activities or the reduction of related costs and charges ”
The principle continues, specifying for the purposes of competence
“… Operating grants are recognized in the year in which the right to receive them arises with certainty, which can also be subsequent to the year to which they refer….”
Concluding as follows
“… Contributions made in the event of exceptional events (for example, natural disasters such as earthquakes, floods, etc.) must also be recognized.”
Being a economic contribution of an extraordinary nature, having as its objective the financial support of the activities in place at the date of entry into force of the decree, it seems to me to be undisputed that the same can be considered a operating account contribution that can be included among those paid on the occasion of exceptional events, whose competence must be identified in the current financial year at the date of entry into force of Legislative Decree 41/2021.
OIC 29 may also be relevant to the case, but in my opinion it is mainly what is specified in paragraph 60 letter B:
(b) subsequent events that must not be included in the balance sheet values
These are those facts that indicate situations that arose after the balance sheet date, which do not require changes in the balance sheet values, as they pertain to the following year ”
As happens in the case of non-repayable contributions provided for by the Sostegni Decree, whose statutory jurisdiction is to be attributed to 2021.
And even more important, where its importance is noted, is the wording of paragraph 61
“61. Facts of type (b) are not disclosed in the quantitative statements of the financial statements;
however, if relevant, they are illustrated in the explanatory notes because they represent events whose failure to communicate could compromise the possibility for the recipients of corporate information to make correct assessments and take appropriate decisions “.