Government Grants Accounting Plan by Board Nears Finish Line (1)

Businesses will receive fresh guidance on how to record the value of government grants in their financial reports.

The Financial Accounting Standards Board voted 4-3 Wednesday to finalize a years-long effort to plug a hole in its rulebook by crafting guidelines regarding certain asset- and income-based grants. While a flood of government relief kept businesses afloat during the height of the Covid-19 pandemic, no specific US rule currently captures the recognition, measurement, and presentation of such grants.

The forthcoming update aims to reduce variations in corporate accounting by giving businesses guidance under US generally accepted accounting principles, or GAAP.