FASB Releases Proposed ASU on Accounting for Government Grants

The FASB has released a proposed Accounting Standards Update (ASU) that would provide guidance on the accounting for government grants received by business entities (i.e., all entities other than employee benefit plans and not-for-profit entities). Under the proposed ASU, the title of ASC 832 would change from Government Assistance to Government Grants.

The proposal is being issued in response to concerns from stakeholders regarding the lack of guidance on this topic in U.S. GAAP, which has resulted in diversity in practice. Because of this lack of authoritative guidance, many entities have analogized to the international guidance in IAS 20 when accounting for government grants. Accordingly, to increase transparency while reducing diversity in practice, the FASB considered the guidance in IAS 20 when developing the proposed ASU while making targeted improvements to this guidance.

For more information, see the press release on the FASB’s Web site.