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FASB updates guidance on government grants

The FASB has released an accounting standards update (ASU) to provide clear guidance on the accounting for government grants received by business entities. This update builds on previous guidance from 2021, addressing stakeholder requests for enhanced transparency. FASB chair Richard Jones said: "The new ASU adds guidance in an area where stakeholders have consistently highlighted a need for it, benefitting both preparers and investors." The amendments include specific disclosure requirements and recognition criteria for government grants, which are defined as transfers of monetary or nonmonetary assets from a government to a business entity. The new rules will take effect for public entities after December 15th 2028, and for other entities after December 15th 2029.

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