Government subsidy: cost cuting measure or revenue enhancement?

Hi,

It depends on who is your client.

• For a private company, it will be just a part of revenues that otherwise would be paid by the end user.
• For a government-owned company or a public-private partnership, it may be a decrease in revenues. Imagine government subsidizing the subway tickets for veterans. If the subway is not privately owned - government most probably will subsidize less than a regular ticket price.
• I can't imagine a case when government subsidies will be a cost-cutting tool

Best,

Vlad