Skip to content

Standards Update: ASU No. 2021-10, Government Assistance (Topic 832)

February 23, 2022

The Financial Accounting Standards Board (FASB) regularly issues Accounting Standards Updates (ASUs) to make changes to the FASB Codification, the primary source of Accounting Principles Generally Accepted in the United States (GAAP). The FASB recently issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance to increase transparency about assistance provided to businesses by a government that has been accounted for by analogizing to a grant or contribution accounting model.


ASU No. 2021-10 applies to business entities that account for government assistance using a grant or contribution accounting model by analogy to other accounting guidance (i.e., International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance or ASC Subtopic 958-605, Not-for-Profit Entities: Revenue Recognition). The amendments do not apply to not-for-profit entities or most employee benefit plans.

Upon implementation of ASU 2021-10, the following disclosures will be required for business entities that account for government assistance by analogizing to a grant or contribution accounting model:

  • Information about the nature of the transactions and the related accounting policy used to account for the transactions
  • The line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item
  • Significant terms and conditions of the transactions, including commitments and contingencies.

Many business entities had already elected to include disclosures like those required by ASU No. 2021-10 in their financial statements. However, the lack of specific authoritative guidance in GAAP related to government assistance provided to business entities has created diversity in the recognition, measurement, presentation, and disclosure for these transactions. The disclosures required by ASU No. 2021-10 are intended to provide transparent information to users of financial statements related to government assistance.

Effective Date and Transition

ASU No. 2021-10 is effective for all entities within its scope for financial statements issued for annual periods beginning after Dec. 15, 2021 and can be applied either prospectively or retrospectively. Early application is permitted.

Please contact your KSM advisor with questions or complete this form.

We're Looking for
Remarkable People

At KSM, you’ll be encouraged to find your purpose, exercise your creativity, and drive innovation forward.

Explore a Career Full of Possibilities