Admin—FASB published a proposed Accounting Standards Update (ASU) that would establish authoritative guidance on the accounting for government grants received by business entities, guidance that would serve to fill a hole in GAAP.
According to a FASB news release, many businesses currently apply International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, in the absence of specific authoritative guidance in GAAP about the recognition, measurement, and presentation of a grant received by a business entity from a government.
In response, FASB launched in 2022 for public comment 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.
As a result of feedback from that project, the proposed ASU published Tuesday aims to "leverage the guidance in IAS 20 with targeted improvements." The proposed ASU is open for public comment through March 31, 2025.
FASB recently published an invitation to comment (ITC) that gives stakeholders the opportunity to provide feedback on potential standard setting related to financial KPIs.
According to a news release, stakeholders in a 2021 ITC suggested that FASB consider a project related to financial KPIs, which FASB defines as measures "calculated or derived from the financial statements and/or underlying accounting records that [are] not presented in the GAAP financial statements."
Examples of financial KPIs include EBITDA (earnings before interest, taxes, depreciation, and amortization); free cash flow; organic sales growth; and adjusted net income.
FASB is soliciting feedback on potential standard setting for financial KPIs, including:
Comments are being accepted through April 30, 2025.
— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.
