Small Public Filers Urge Efforts on Accounting Rules for Government Grants

FASB’s current research on accounting for government grants should be advanced to its rulemaking agenda—and treated as a priority matter—as the topic is pervasive and rife with reporting diversity, small public filers told the board. “I think it should be a priority; I’ve been at least at three companies where this has been relevant – large and small,” Ryan Siurek, chief accounting officer at Biodesix, Inc., said during Small Business Advisory Committee (SBAC) discussions on Nov. 10. “You’ve got the 2008–09 financial crisis and all of the activities from the government that occurred; you’ve got the pandemic and the [Paycheck Protection Program] loans and you’ve got—I know this isn’t included—but you’re got below market loans,” he said. “There’s a lot of government grant activity and I think there’s diversity in practice.” Under its research effort, FASB is studying whether to incorporate International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance into U.S. GAAP as designed. Feedback from the SBAC was a clear “no.” “I would not favor an approach that someone just adopts IAS 20 [but] I think IAS 20 is a good starting point,” Siurek said. The 12-member SBAC serves as a standing resource for FASB, providing focused input from the perspective of small public companies.


Draft on Accounting for Business Combinations for Small and Midsize Entities Issued

The IASB wants to ensure that companies are able to easily digest and opine on how the board plans to simplify the accounting rules for business combinations and goodwill in the IFRS for SMEs guidance. In response, the board issued a separate document on November 11 focused on Section 19, “Business Combinations and Goodwill,” which was initially included in a September proposal that would update the IFRS for SMEs standard. The new document aims to “facilitate readability” by removing mark-ups related to Section 19, which would align the acquisition method of accounting in International Financial Reporting Standard (IFRS) 3, Business Combinations. Specifically, on Sept. 8, the IASB published Exposure Draft 2022-1, “Third edition of the IFRS for SMEs Accounting Standard,” to revise 34 sections of the standard, including Section 19. If finalized, the proposal would be the second comprehensive round of changes tailored for small and medium-sized entities (SME) since 2015 aimed at aligning the 2018 conceptual framework with several broad accounting standards. Comments are due by March 7, 2023.


Board Would Tackle Crypto Rules under Certain Conditions

GASB would elevate its current monitoring efforts around cryptocurrencies if the topic were to become more prevalent and an accounting dilemma develops, Chair Joel Black said recently. The board’s research shows that governments are currently using digital assets in three primary ways: as an investment, as a form of payment, and with respect to unclaimed or confiscated property, he said on LinkedIn in late October 2022. Earlier this year, the board revealed it started monitoring activity on the topic.  “We thought it was important to do that because we’re seeing cryptocurrency discussed in many states in many different ways,” Black explained. “We felt we needed to understand the different implications that these types of assets have for state and local governments, how they are being used, and how the activity around them is evolving.” Nearly two thirds of U.S. states have proposed some kind of legislation on digital assets within the last year. Not all of that legislation deals with accepting digital assets as a form of payment—some were more regulatory in nature, and others encouraged cryptocurrency activity.