Jul 24, 2019
The Financial Accounting Standards Board (FASB) voted unanimously on Wednesday, July 17, 2019, to propose delaying the effective date for portions of its major accounting standards, including ASC 842, Leases, for privately held companies and nonprofit organizations.
Also, the new proposal is expected to create two new “buckets”: (1) SEC filers other than smaller reporting companies (SRCs, as defined by the SEC) and (2) all other entities, allowing at least a two-year difference in the effective date between the buckets.
Why is this important?
For private companies, ASC 842 was previously scheduled to take effect for annual financial reporting periods beginning after December 15, 2019 (2020 for calendar year-end companies), and interim periods after December 15, 2020. However, this delay means companies now have an extra year to adopt the new lease accounting rules, subject to the FASB issuing a formal proposal for public comment before finalizing the new effective dates.
The FASB staff will draft the proposed amendments to existing standards and provide them to the Board to vote by written ballot, after which they are expected to be exposed for a public comment period of 30 days. The FASB expects to issue the final amendments later this year.
As we continue to consult with current clients, we highly encourage companies to proactively address the implementations of both standards as evaluation and adoption typically take longer than anticipated.
For additional insights or assistance on the adoption of the new revenue standards please contact one of the following members of our audit team at 419.891.1040
Tracie Youngless Kristin Metzger Juli Seiwert Ryan Leininger Amy Barber
Categories: Audit & Accounting