4.152 Definition:
Investment grants (D.92) consist of capital transfers in cash or in kind made
by governments or by the rest of the world 
to other resident or non-resident institutional units to finance all or part
of the costs of their acquiring fixed assets.
4.153
Investment grants can be made in cash or in kind. Investment grants in kind
consist of transfers of transport equipment, machinery and other equipment by
governments to other resident or non-resident units and also the direct provision
of buildings or other structures for resident or non-resident units.
4.154
Investment grants do not include transfers of military equipment in the form
of weapons or equipment whose sole function is to fire such weapons, as they are
not classified as fixed assets.
4.155
The value of capital formation carried out by general government for the
benefit of other sectors of the economy is also to be shown under investment grants
whenever the beneficiary is identifiable and becomes the owner of the capital.
In such cases, the capital formation is recorded among changes in assets in the capital account of the beneficiary and is financed by an investment
grant which appears among changes in liabilities and net worth in the same account.
4.156
Heading D.92 includes not only single non-recurrent payments designed to
finance capital formation during the same period, but also instalment payments in
respect of capital formation carried out during an earlier period. Thus, those
parts of the annual payments by general government which represent the
amortisation of debts, contracted by enterprises for the purpose of capital formation
projects for whose amortisation the government has assumed total or partial
responsibility, are also treated as investment grants.
Grants for interest relief made by general government are, however, excluded,
even when the object of the relief is to encourage capital formation. In
practice, the assumption by public authorities of part of the interest charges
constitutes, like the flow of interest itself, a current distributive transaction.
Nevertheless, when a grant serves the dual purpose of financing the amortisation
of the debt contracted and the payment of the interest on the capital borrowed,
and when it is not possible to separate these two elements, the whole of the
grant is treated in the accounts as an investment grant.
4.157
Investment grants to the sector non-financial corporate and quasi-corporate
enterprises include, in addition to grants to private enterprises, capital grants
to public enterprises recognised as independent legal entities, provided that
the government department which makes the grant does not retain a claim against
the public enterprise.
4.158
Investment grants to the households sector include equipment and modernisation
grants to businesses other than corporate or quasi-corporate enterprises and
grants to households for the construction, purchase and improvement of dwellings.
4.159
Investment grants to general government include all payments (except grants
for interest relief) made to sub-sectors of general government
4.160
Investment grants to non-profit institutions from general government and from
the rest of the world are distinguished from current transfers to non-profit
institutions by using the same criterion.
4.161
Investment grants to the rest of the world should also be restricted to
transfers with the specific objective of financing capital formation by non-resident
units. They include, for example, unrequited transfers for the construction of
bridges, roads, factories, hospitals or schools in developing countries, or for
constructing buildings for international organisations. They may comprise
instalment payments over a period of time as well as single payments. This heading
also covers the supply of fixed capital goods free of charge.
4.162
Time of recording: Investment grants in cash are recorded when the payment is
due to be made. Investment grants in kind are recorded when the ownership of
the asset is transferred.
4.163
In the system of accounts, investment grants are recorded:
for the purpose of financing capital formation. The most important examples
are transfers from central government to local authorities for the specific
purpose of financing their gross fixed capital formation. It should be emphasised
that transfers of a general nature intended for various or indeterminate
purposes are shown under current transfers within general government, even if they are
partly used to cover expenditure on capital formation.