Attention FAE Customers:
Please be aware that NASBA credits are awarded based on whether the events are webcast or in-person, as well as on the number of CPE credits.
Please check the event registration page to see if NASBA credits are being awarded for the programs you select.

FASB Seeks Input About Adding Guidance on Government Grant Accounting

By:
Karen Sibayan
Published Date:
Nov 20, 2024

iStock-826741128 Accounting Standards

The Financial Accounting Standards Board (FASB) released a proposed Accounting Standards Update (ASU) on Nov. 20 that would establish authoritative guidance on accounting for government grants received by businesses. The deadline for comments on this ASU is Mar. 31, 2025. 

Generally Accepted Accounting Principles (GAAP) do not offer any specific authoritative guidance regarding the recognition, measurement and presentation of a grant received by a business entity from a government. Thus, many businesses now apply International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, by analogy, at least partly, to account for government grants. 

In 2022, the FASB issued an Invitation to Comment Accounting for Government Grants by Business Entities—Potential Incorporation of IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, into GAAP. As a response, there was expressed support for leveraging the guidance in IAS 20 to develop accounting guidance for government grants in GAAP, noting that it would limit diversity in practice given that entities would apply the guidance instead of analogizing to it or other guidance. This would narrow the variability in accounting for government grants. 

The proposed ASU would leverage the guidance in IAS 20 with targeted improvements to establish guidance on recognizing, measuring and presenting a government grant, including one related to an asset and another related to income. It also would require, consistent with current disclosure requirements, disclosure regarding the nature of the government grant received, the accounting policies utilized to account for the grant  and significant terms and conditions, among other things.


Click here to see more of the latest news from the NYSSCPA.