To the Point - FASB requires disclosures by business entities about certain types of government assistance

Overview

The FASB issued final guidance that requires business entities to make annual disclosures about transactions with a government (including government assistance) they account for by analogizing to a grant or contribution accounting model (e.g., IAS 20, Accounting for Government Grants and Disclosure of Government Assistance; ASC 958-605, Not-for-Profit Entities – Revenue Recognition). The required disclosures include the nature of the transaction, the entity’s related accounting policy, the financial statement line items affected and the amounts reflected in the current period financial statements, as well as any significant terms and conditions. An entity that omits any of this information because it is legally prohibited from being disclosed needs to include a statement to that effect. The guidance is effective for financial statements issued for annual periods beginning after 15 December 2021, and early adoption is permitted.