The Financial Accounting Standards Board (FASB) will finalize new rules on accounting for software costs, environmental credits and government grants in 2025. The FASB’s standards typically entail greater compliance requirements but also provide technical clarity and details.
Software costs – The proposed revisions may require reporting of cash amounts tied to software expenditures and clarify when to expense or capitalize these costs.
Government grants – For a grant related to income, companies may have to recognize them on their income statement in the periods in which they incur any related expenses. Companies will need to account for and disclose grants related to an asset, but will have the option to record the gross or net value of the grant. If the net value option is used, the company would not have to disclose the amount by which they reduced the value of the asset tied to the grant over time.
Environmental Credits – The FASB standards will also provide rules for environmental accounting in recording credits the company received for their compliance program or voluntary use.
The Wall Street Journal articles on the new FASB rules are behind a paywall.
