The Financial Accounting Standards Board (FASB) has been deliberating its project for a proposed Accounting Standards Update (ASU), Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance since January 29, 2014. The project seeks to increase transparency for users of financial information due to diversity in practice and lack of guidance on how to account for government assistance under current U.S. GAAP - as well as the inconsistencies between U.S. GAAP & International Financial Reporting Standards (IFRS) on the topic.
Comment Period Closed
BIGcontrols, submitted a comment letter on the FASB's Exposure Draft for Topic 832 on the February 10, 2016 deadline. In our comment letter, we agree with the objectives of the project and most of the Board's questions on the proposed ASU. However, we believe the Board should broaden its scope to include non-income tax-related statutory incentives in the disclosure requirements. For income tax-related incentives, we believe a current Topic 740 should be updated to mirror the disclosures under deliberation on Topic 832.
"If the objective of the Board is to provide financial statement users improved information on an entity’s financial results, we believe it would be beneficial to include a more holistic view."
A number of other companies and non-profit organizations who issued comment letters believe there will be a heavy cost to implement these new disclosures. In fact, many point to the fact that they do not have current systems in place to track or report on their government incentives. Ironically, that's exactly what BIGcontrols was designed to accomplish. Perhaps now the FASB will know we exist to support their efforts to provide transparency & accountability for users of financial information.
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