Accounting for Government Assistance
Last updated on May 2, 2013. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.
(Updated sections are indicated with an asterisk *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
The objective of this research project is to explore whether there is a need to establish explicit guidance for the accounting and disclosure of government assistance that improves the content, quality and comparability of financial information and financial statements and that is responsive to the emerging issues in the changing financial and economic environment in which reporting entities operate. The results of this research effort will be used by the Board to decide whether to add a standards-setting project to the Board’s agenda.
*Decisions Reached at Last MeetingThere have been no Board Meetings on this project.
The staff is currently performing additional research and outreach to understand whether government assistance is material to a significant number of reporting entities and whether current financial reporting provides decision-useful information about the accounting for government assistance. The staff plans to aggregate this research and outreach and bring it to the Board for its consideration at a meeting in the second half of 2013. The staff will then make recommendations to the Board on whether a formal project should be added to the technical plan.
*Board/Other Public Meeting Dates
The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
The following are links to the minutes for each meeting.
|*November 28, 2012||Education Session—Preliminary research and findings on the accounting for government assistance|
A statement in the July 13, 2012 SEC staff report, Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers, comparing U.S. GAAP to IFRS pointed out that U.S. GAAP contains areas, such as government grants, for which guidance is in need of continued development. Currently there is no explicit U.S. GAAP accounting standard for the accounting for government assistance. FASB Accounting Standards Codification® Topic 958, Not-for-Profit Entities, provides guidance for contributions received and applies to all entities that receive contributions. However, this guidance excludes tax exemptions, tax incentives, tax abatements, and the transfer of assets from governments to business entities from the scope.Due to the lack of explicit U.S. GAAP guidance, a research project was initiated to determine whether to add a project to the Board’s agenda on the accounting for government assistance. The scope and accounting considerations of a potential project on the accounting for government assistance would consider the types of government assistance that are pervasive and material to reporting entities, the complexities and terms of government assistance programs and any diversity in practice that currently exists. Certain types of government assistance programs that may be considered in a potential project include grants related to assets or capital projects, payments for expenditures, low-interest and interest-free loans, loan guarantees, bond guarantees, revenue subsidies, certain insurance payments and tax assistance including tax credits, payments in lieu of tax credits, tax exclusions or exemptions, property tax abatements and other tax benefits.
*Contact InformationMeredith Brown
Libby Van Wagenen
Postgraduate Technical Assistant