New FASB Rule: How U.S. Companies Must Report Government Grants by 2029

Learn how the FASB rule changes will effect U.S. companies and how they report government grants, and how to prepare now to meet the new compliance standards.

What are the New FASB Rules?

The Financial Accounting Standards Board (FASB) has approved a new rule that will require U.S. public companies to formally recognize and disclose government grants in their financial statements beginning in 2029, with private companies following in 2030. The rule applies to both monetary awards—such as cash and forgivable loans—and non-monetary awards like land, buildings, and equipment. For the first time, for-profit companies that receive grants will face standardized accounting requirements similar to what nonprofits have long followed.

Until now, U.S. GAAP had no dedicated standard for government grant accounting. Many companies either followed voluntary guidance from the International Accounting Standards Board (IFRS) or developed internal policies. This created wide variability in how grants were reported, making it difficult for investors, lenders, and regulators to compare financial statements across organizations—especially after pandemic-era relief programs poured billions into businesses.

What the New Rule Requires

Under the new standard:

Income-related grants must be recognized on the income statement in the periods when the related expenses occur.
Asset-related grants must be disclosed and, either

1. Recorded as deferred income, or
2. Used to reduce the value of the related asset (with the reduction amount disclosed).

This applies to:

Monetary assets – Cash, loans expected to be forgiven
Non-monetary assets – Physical assets such as buildings, land, equipment

Who Will Be Affected?

While nonprofits have long navigated grant compliance, these new requirements pull for-profit companies into similar territory. Sectors most likely to feel the impact include:

Manufacturing & clean energy (equipment and facility incentives)
Healthcare & biotech (research funding)
Technology (innovation grants)
Workforce development & training providers
Infrastructure & transportation firms

Timeline for Implementation

Public companies – Required for annual financial reports in 2029
Private companies – Required for annual financial reports in 2030
Early adoption – Permitted, which may be beneficial for companies with large, ongoing grant portfolios

While the dates seem far off, grant agreements and related expenses can span multiple years. Waiting until 2028 to prepare could mean having to adjust prior reporting periods.

How to Prepare Now

Inventory Existing Grants – Identify all awards received, including cash, forgivable loans, and physical assets.
Review Current Accounting Practices – Document how grants are recognized today.
Gap Analysis – Compare your current process with the new FASB requirements.
Update Policies & Systems – Ensure your accounting software can handle the required recognition and disclosure methods.
Train Finance & Compliance Teams – Make sure staff understand timing, documentation, and reporting rules.

Consider Early Adoption – Align sooner to avoid costly retroactive adjustments.

How MissionGranted Can Help

With government grant reporting becoming a regulated requirement for for-profit companies, the need for precise, automated tracking is greater than ever. MissionGranted helps organizations:

Track grant income and assets-related awards in real time
Apply consistent allocation and recognition methods
Generate audit-ready reports aligned with compliance standards

Get ahead of the 2029 deadline. Request a demo to see how MissionGranted can make government grant accounting simpler, faster, and more accurate.