Chapters
Annual Report 2020

7. Government Grants

Accounting policy

Government grants comprise amounts received by the Group from governments as reimbursement for costs incurred. Most of the government grants (to be) received directly by the Group related to compensation for employee costs incurred during the reporting period. Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them, if any, and that the grants will be received. Government grants related to reimbursement for employee costs are recognized in the consolidated Income Statement as a reduction of the employee expenses over the periods, in which the Group recognized the employee expenses.

In 2020, the amount recognized as a reduction of employee expenses in the consolidated Income Statement for government grants can be specified by function as follows:

in thousands of EUR

2020

Cost of sales and direct related costs

1,066

Selling and marketing costs

49,833

General and administrative costs

4,045

54,944

The Group was entitled mainly to subsidies to compensate some of the employee costs under the condition that employee staff contracts should not be terminated as a result of lower profitability due to the COVID-19 pandemic. Most of these government grants were received in the United Kingdom and France, where the Group had to temporary cease its operations and furlough some of its employees during several months from March 2020.

There is no significant outstanding receivable or liability related to the government grants as at 31 December 2020.