FASB is seeking feedback on whether IAS 20 represents a workable solution for improving U.S. GAAP for business entities as it relates to the accounting for government grants.
FASB's Invitation to Comment (ITC), 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, is designed to give FASB input on whether to begin a standard-setting project on the topic.
Stakeholders are encouraged to review and provide comment on the ITC by Sept. 12, 2022.
"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," FASB technical director Hillary Salo said in a news release.
In 2021, FASB issued the Invitation to Comment, Agenda Consultation, which gave stakeholders the opportunity to provide input on FASB's future priorities. The 2021 ITC asked stakeholders to weigh in on a broad range of issues, including whether 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.
FASB said that about three-quarters of stakeholders who provided specific feedback on that question, including investors, practitioners, preparers, and state CPA societies, "preferred that FASB leverage" IAS 20.
In response to this feedback, 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 use of government grants information to their analysis of a company's financial performance.
— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.