Issues In-Depth | December 2022

Insight

Government assistance disclosures

We answer implementation questions on the new government assistance disclosure requirements in ASC 832 and ASU 2021-10.

Mike Breen

Mike Breen

Partner, Audit, KPMG US

+1 212-954-3274

Michael Kraehnke

Michael Kraehnke

Partner, Dept. of Professional Practice, KPMG US

+1 303-382-7172

Meredith Canady

Meredith Canady

Partner, Dept. of Professional Practice, KPMG US

+1 212-909-5858

The disclosure requirements in ASC 832 apply only to business entities that account for government assistance under specific accounting models. Our issues in-depth addresses implementation questions regarding scope and the nature of the required disclosures.

Applicability

  • All business entities, except not-for-profit entities and employee benefit plans

Relevant dates

  • ASU 2021-10 is effective for financial statements issued for annual periods beginning after December 15, 2021. The effective date is the same for all entities in the scope of this ASU. Early adoption is permitted.  

Key impacts

There is limited US GAAP guidance on accounting for government assistance, which has led to diversity in practice. Although the FASB has not provided specific accounting guidance, it has created disclosure requirements for the receipt of certain types of government assistance. Such assistance has become increasingly common and can take different forms − e.g. grants, tax credits and loan guarantees. 

The disclosure requirements – contained in ASC 832 – apply only to business entities that account for government assistance under specific accounting models. There are several implementation considerations regarding the limited scope of ASC 832 and the nature of the disclosures.

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