Our recent Q1 2026 Quarterly Perspectives: Financial Reporting & Beyond webcast included discussions on critical developments in the political and regulatory environment with the recent ruling on IEPPA tariffs, a new FASB standard on accounting for government grants received by business entities, and other regulatory and standard-setting developments and important reminders.
Since the date of the webinar, there have been continuing developments with the IEPPA tariff ruling. To stay up to date, subscribe to our From the Hill series covering the latest developments.
IEPPA-Based Tariffs Ruled Not Legal
On February 20, 2026, the Supreme Court ruled that IEPPA-based tariffs were not legal. This is a landmark decision with significant legal, accounting, and compliance considerations for those who charged their customers, or passed through, the affected tariffs. The government recently announced its new Consolidated Administration and Processing of Entries (CAPE) system, which went live on April 20, whereby entities that paid IEPPA tariffs (both unliquidated and nonfinal liquidated entries) are able to apply for a refund. Entities will want to ensure documentation is in order to be able to pursue refunds as applicable, and those that charged tariffs through to customers will want to review contracts to determine if refunds to customers are required.
There are at least five other options under various legislative acts that could be pursued by the current administration if the IEPPA tariffs cannot be used. It remains to be seen what, if any, new tariff regulations the administration may impose.
ASU 2025-10, Accounting for Government Grants Received by Business Entities
ASU 2025-10, Accounting for Government Grants Received by Business Entities, establishes authoritative guidance on the accounting (recognition, measurement, and presentation) for government grants received by business entities. It is applicable to all business entities (except for nonprofit entities and employee benefit plans) that receive a government grant related to one of their assets or to their income. Many entities may have previously been analogizing to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, as there was a lack of FASB guidance in the past.
Although the standard is not effective until at least calendar year 2029 for public business entities, early adoption is permitted and may be preferable if entities have material government grants, as there is now clear recognition and measurement guidance along with required disclosures related to these grants.
Additional Standards Setting & Regulatory Activity in 2026
Although FASB did not issue any final standards in the first quarter of 2026, they have stayed busy after issuing five new accounting standards in the fourth quarter of 2025. The FASB chair noted in his report from the last quarter of 2025 that they received more than 120 comment letters as a result of their 2025 agenda consultation project. Stakeholders identified more than 70 issues for the Board to consider.
To date of our webcast, the Board has added agenda projects on the Accounting for Transfers of Crypto Assets, Classification of Certain Digital Assets as Cash Equivalents, and Equity Method of Accounting: Targeted Improvements. FASB staff has a goal to bring all feedback from the agenda consultation back to the Board by the end of the summer of 2026 for agenda decisions. In January 2026, the Financial Accounting Foundation (FAF) noted that it is seeking a new FASB chair with a term starting in July 2027 and ending in June 2034 as the current chair is term-limited. A new chair might impact any current or future projects.
On the Horizon
Getting down to the accounting for any tariff refunds, along with then evaluating contracts with customers for any potential implications should entities receive a refund, is going to be a significant undertaking. To date of the webcast, FASB and the SEC have not published any specific accounting guidance for tariffs, so existing GAAP would apply. The downstream impact of the conflict in the Middle East and potential accounting and financial reporting implications is also a concern for many.
And as a reminder to public business entities, adoption of FASB ASU 2024-03 on disaggregated income statement disclosures, referred to as DISE, is required for annual reporting periods beginning after December 15, 2026. Entities will want to review their systems now to see if any changes will be necessary to help ensure they can begin to capture the information at the level required by this new standard from the start of the first year required.
How Forvis Mazars Can Help
At Forvis Mazars, we assist organizations in navigating regulatory changes, strengthening internal communication, adopting new standards, and addressing emerging risks such as artificial intelligence (AI) integration. Our experienced professionals provide insights into governance frameworks, fraud prevention strategies, and evolving accounting and disclosure requirements.
By aligning with your objectives, we aim to support informed decision making and build confidence in your financial reporting processes. Interested in learning more about these topics? Check out the archived webinar, “Quarterly Perspectives: Financial Reporting & Beyond/Q1 2026,” or reach out to one of our professionals.