The Financial Accounting Standards Board (FASB) issued an Invitation to Comment (ITC), on its “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.”
FASB also rescheduled its upcoming webcast that will provide a semi-annual update on its standard-setting activities pertaining to private companies and nonprofit organizations.
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 Sept. 12.
“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 the board’s future priorities. 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.
FASB’s rescheduled webcast “IN FOCUS: FASB Update for Private Companies and Not-for-Profit Organizations, will take place on from 1 p.m. until 3 p.m. on Monday, June 27. Participants in the live broadcast (which is offered free to those who preregister) will be eligible for up to 2.5 hours of Continuing Professional Education (CPE) credit. (CPE credit is not available for group viewing of the live broadcast.)
For more information on both, go to www.fasb.org
