FASB issues ASU on accounting for government grants
Defining Issues | December 2025
ASU 2025-10 provides guidance on how business entities should recognize, measure and present government grants received.
Applicability
- ASU 2025-10
- Business entities that receive government grants
Relevant dates
| Effective date | Public business entities | Other than public business entities |
|---|---|---|
| Annual and interim periods beginning after | Dec 15, 2028 | Dec 15, 2029 |
| Early adoption permitted? | Yes, for interim or annual periods for financial statements that have not yet been issued or made available for issuance. If adopted in an interim period, guidance would be applied as of the beginning of the annual period that includes that interim period | |
Key impacts
ASC 832 as originally promulgated contained only disclosure requirements concerning the receipt of government assistance by business entities. The ASU expands ASC 832 to do the following:
- Prescribe an accounting model based on the main principles in IAS 20 (government grants and government assistance), with revisions to areas such as scope and the recognition threshold.
- Define a government grant as a transfer of a monetary or tangible nonmonetary asset, other than an exchange transaction, from a government to a business entity.
- Provide a recognition threshold under which a grant is not recognized until both of the following are met:
- it is probable that the entity will comply with the grant’s conditions and that the grant will be received, and
- the entity meets the specific recognition guidance for a grant related to an asset or a grant related to income.
- Leverage existing disclosure requirements in ASC 832 for annual periods.
Report contents:
- Source and applicability
- Fast facts, impacts, actions
- Background
- The ASC 832 government grant model
- Effective dates and transition
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FASB issues ASU
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