In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (ASU 2025-10), introducing U.S. GAAP guidance on the accounting for government grants for business entities. The new standard closely aligns with International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, covering monetary and tangible nonmonetary assets received from governments while excluding exchange transactions.
Our white paper addresses the key provision of the new ASU, including:
- The scope of ASU 2025-10
- Recognition and measurement of grants related to assets and to income
- The accounting for the repayment of a government grant
- Presentation and disclosure requirements
- The treatment of government grants in a business combination
- Effective date and transition options
