United States

FASB Staff Q&A regarding the accounting for grants


In June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. Recently, the FASB issued a Staff Q&A regarding certain aspects of the accounting for grants when implementing ASU 2018-08. Among other matters, the Q&A addresses (a) whether, in applying the limited discretion indicator, budgets and provisions around them in grants create barriers to entitlement, and (b) to what extent mandatory cost-sharing requirements in grants are analogous to matching or challenge grants when determining whether and when to recognize grant revenue. 

RSM’s whitepaper includes more information regarding the changes to the accounting for grants and contributions made and received as a result of the issuance of ASU 2018-08.