Accounting for Corporate Government Assistance

Roberts, Francesca

Publication

Accounting for Corporate Government Assistance

Roberts, Francesca

Date

2016

Additional date(s)

2016-05-19

Abstract

This paper explores accounting for corporate government assistance, current attitudes toward disclosing such assistance, and the impacts of accounting for such assistance on companies' financial statements. Specifically, this study investigates the significance of accounting for corporate government assistance and its potential effects on companies' financial statements. The Financial Accounting Standards Board, the body that establishes financial accounting standards in the United States, recently issued a proposal on how to account for such assistance in the United States, suggesting that companies should be required to disclose information about the government assistance they receive. I analyze whether accounting for corporate government assistance affects the way that investors value a company, and I find that accounting for such assistance could change the way that investors value companies.