Grant Thornton submitted a comment letter to the FASB in response to its Invitation to Comment (ITC), Accounting for Government Grants by Business Entities. Because U.S. GAAP currently lacks comprehensive guidance for business entities to account for government grants, the ITC solicits feedback about whether to leverage the guidance in IAS 20 on recognizing, measuring, and presenting government grants in the financial statements. This ITC comes in the wake of the FASB’s issuance of disclosure guidance for government assistance in 2021.
While we generally support leveraging the guidance in IAS 20 to account for government grants, a practice that many of our clients already employ, the firm recommends making certain amendments to IAS 20, including aligning terminology to U.S. GAAP to enhance consistency and removing the option in IAS 20 to present grants on either a gross or net basis.
Read our comments in full here.