The Monetary Accounting Requirements Board is asking its stakeholders to supply suggestions on whether or not it ought to work on a brand new customary to account for presidency grants whereas constructing on an current worldwide customary.
FASB issued an invite to remark doc on Monday requesting enter from accountants and different constituents on whether or not an older worldwide accounting customary, often known as IAS 20, Accounting for Authorities Grants and Disclosure of Authorities Help, needs to be revised and up to date for U.S. GAAP. The usual was initially issued by the Worldwide Accounting Requirements Committee in April 1983 and was later adopted in April 2001 by the Worldwide Accounting Requirements Board after the IASC turned the IASB.
Accounting for presidency grants has taken on extra relevance through the COVID-19 pandemic, when each private and non-private firms obtained billions of {dollars} in assist from the federal authorities within the type of grants and forgivable loans from the Paycheck Safety Program and different broadly used stimulus initiatives. FASB undertook an agenda session final 12 months asking for brand spanking new initiatives that its stakeholders wished it to sort out, and requests for steering on authorities grants have been among the many areas the place many commenters expressed curiosity. Although it’s a world accounting customary, IAS 20 might give FASB a minimum of a place to begin for adjusting its current requirements on this necessary space.
Throughout final 12 months’s agenda session, FASB requested stakeholders to weigh in on all kinds of points, together with whether or not FASB ought to pursue a venture on the popularity and measurement of presidency grants, and, in that case, whether or not it ought to leverage an current grant or contribution mannequin or develop a brand new accounting mannequin. Roughly three-quarters of stakeholders who gave particular suggestions on that query, together with buyers, practitioners, preparers and state CPA societies, indicated they most popular FASB to leverage IAS 20.
FASB, GASB and FAF logos on the wall at headquarters in Norwalk, Connecticut
Courtesy of GASB
In response to the suggestions, FASB chair Richard Jones added a venture, Accounting for Authorities Grants, Invitation to Remark, to the analysis agenda. As a part of that analysis venture, the ITC asks for additional suggestions from stakeholders on the related necessities in IAS 20 and consists of some particular questions for buyers concerning the significance and usefulness of presidency grant info by way of analyzing an organization’s monetary efficiency.
The invitation to remark will give constituents extra alternative to supply suggestions particularly on particulars associated as to if IAS 20 represents a workable answer for enhancing GAAP within the U.S. monetary reporting setting for enterprise entities in relation to accounting for presidency grants. FASB is encouraging its stakeholders to evaluate and supply feedback on the ITC proposal by Sept. 12, 2022.
“This ITC invitations all our stakeholders to share enter that can assist the board determine whether or not to undertake a standard-setting venture on the popularity, measurement and presentation of presidency grants for enterprise entities,” stated FASB technical director Hillary Salo in an announcement.