The Financial Accounting Standards Board (FASB) has published an Invitation to Comment (ITC), Accounting for Government Grants by Business Entities, to solicit stakeholder feedback on whether incorporating the recognition, measurement and presentation requirements of International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Accounting Assistance, would improve the accounting for government grants under U.S. generally accepted accounting principles. The responses to this ITC will help inform the FASB as it considers whether to add a project to its technical agenda and commence standard setting in this area.
The ITC is looking for views on, among other matters, the scope and definition of the terms government and government grants, and whether they are understandable and operable in the U.S. financial reporting environment. The ITC also explores experiences of those companies that already analogize the requirements of IAS 20 for accounting for their government grants. Further, the FASB seeks to understand whether the requirements in IAS 20 will improve comparability in accounting for government grants and whether decision-useful information will be provided for investors. The ITC does not seek specific input on related disclosure matters in light of the FASB disclosure guidance related to government assistance issued in November 2021.
The ITC is open for comment through September 12, 2022.