Implementation struggles experienced by federal agencies have prompted the Federal Accounting Standards Advisory Board (FASAB) to propose delaying the effective date of its standards for accounting for leases for two years.
Under the proposal, Statement of Federal Financial Accounting Standards (SFFAS) 54, Leases: An Amendment of SFFAS 5, Accounting for Liabilities of the Federal Government, and SFFAS 6, Accounting for Property, Plant, and Equipment, would take effect for reporting periods beginning after Sept. 30, 2022.
Early adoption would not be permitted, so reporting entities would continue to follow the current FASAB guidance addressing lease transactions until the new guidance takes effect. The current guidance in paragraphs 43 to 46 of SFFAS 6 and paragraphs 20 and 29 of SFFAS 6 will be superseded when SFFAS No. 54 takes effect.
FASAB Chairman George Scott said the proposed delay was appropriate considering the challenges federal agencies are having related to developing systems and complying with data requirements.
“The proposed deferral of the new lease accounting requirements would allow agencies to improve the quality and completeness of their data and update their lease accounting systems and controls to conform their financial reporting to the new standards,” Scott said.
Comments on the proposal are due Jan. 31 and can be emailed to firstname.lastname@example.org.
— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.