Staff to Perform Field Testing on FASB Government Assistance Project
Members of the Financial Accounting Standards Board (“FASB”) want to perform additional outreach concerning the board’s government assistance project. During its February 27 meeting, the FASB agreed that staff members should conduct further field testing to confirm the costs and benefits of a proposal under Accounting Standards Update (“ASU”) No. 2015-340, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance.
The government assistance project aims to require businesses to disclose information on financial assistance like government grants and low-interest loans. Governments often distribute such assistance to encourage business relocation or expansion in a jurisdiction. Some investors, however, believe these arrangements help them understand a business’ financial picture, and are asking for more disclosures. Added disclosures would include information like the extent of the government assistance, the impact on financial statement totals, and the terms and period of the agreements. Businesses would not have to calculate the sum of the received assistance.
Largely, businesses have criticized the proposal in ASU No. 2015-340. Businesses warned the FASB in comment letters that the proposal could be hard to implement and expose their confidential arrangements with governments.