USA Economic Development Incentive


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If a company receives an economic development incentive, and there is no official GAAP specific guidance, how is this being accounted for by others?
 
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Joined
Jun 30, 2017
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You are right, GAAP eliminated the requirement to report extraordinary items in 2015. Companies are however still required to identify and comment on items that are infrequent, unusual, and not to be expected on an ongoing basis. I list them as "other income/expenses" "below the line" between Net Income and Comprehensive Income with a footnote. I use this rule for both, public as well as small business companies to make sure that financial analysis, in particular, trend analysis are not misleading.
You may want to think about how to deal with this transaction in your tax filing. There again, footnotes or an attached note to the IRS could prevent unnecessary questions.
 
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