According to the latest accounting standard updates in November 2021 (Topic 832), if a business receives government assistance, e.g. PPP loans or Employee Retention Credits, it is required to disclose the followings about the assistance in its annual financial statements:

  • The nature of the assistance, including a general description of the assistance and the form in which the assistance was received (e.g. cash or other assets).
  • The accounting policies used to account for the assistance.
  • The line items on the balance sheet and income statement that are affected by the assistance, and the amounts applicable to each financial statement line item in the current reporting period.
  • Significant terms and conditions of the assistance, such as:
    • The duration or period of the assistance.
    • Commitments made by the business and the government.
    • Provisions, if any, for recapture.
    • Other contingencies, if any.
  • Restrictions (if any): in case disclosures are prohibited by the government, the business shall disclose a description of the general nature of the assistance and indicate that full disclosures are legally prohibited by the government.



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