FASB Stakeholders Invited to Share Their Views on Accounting for Government Grants
Invitation to Comment Seeks Input on Potential GAAP Guidance on Recognition, Measurement, and Presentation of Government Grants by Businesses
Norwalk, CT—June 13, 2022—The Financial Accounting Standards Board (FASB) today published an Invitation to Comment (ITC), Accounting for Government Grants by Business Entities: Potential Incorporation of IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, into Generally Accepted Accounting Principles. The ITC gives stakeholders the opportunity to provide feedback on whether IAS 20 represents a workable solution for improving GAAP in the U.S. financial reporting environment for business entities as it relates to the accounting for government grants. Stakeholders are encouraged to review and provide comment on the ITC by September 12, 2022.
“This ITC invites all our stakeholders to share input that will help the Board decide whether to undertake a standard-setting project on the recognition, measurement, and presentation of government grants for business entities,” noted FASB Technical Director Hillary H. Salo.
In 2021, the FASB issued the Invitation to Comment, Agenda Consultation, which gave all stakeholders the opportunity to provide input on what the Board’s future priorities should be. The 2021 ITC asked stakeholders to weigh in on a broad range of issues, including whether the FASB should pursue a project on the recognition and measurement of government grants—and, if so, whether it should leverage an existing grant or contribution model or develop a new accounting model.
Approximately three-quarters of stakeholders who provided specific feedback on that question, including investors, practitioners, preparers, and state certified public accounting societies, preferred that the FASB leverage International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance.
In response to this feedback, the FASB Chair Richard R. Jones added a project, Accounting for Government Grants, Invitation to Comment, to the research agenda. Published as part of that research project, the government grants ITC solicits additional feedback from stakeholders on relevant requirements in IAS 20 and includes specific questions for investors about the importance and utility of government grants information to their analysis of a company’s financial performance.
The ITC is available at www.fasb.org.