A one-year delay in the lease accounting effective date for private companies and most not-for-profits is among the changes FASB proposed Tuesday to provide relief to financial statement preparers as a result of the coronavirus pandemic.
FASB proposed delaying the lease accounting effective date for:
- Private companies and private not-for-profits, which would have the option to apply the new lease accounting standard for fiscal years beginning after Dec. 15, 2021, and to interim periods within fiscal years beginning after Dec. 15, 2022.
- Not-for-profits that have issued or are a conduit bond obligor for securities that are traded, listed, or quoted on an exchange or an over-the-counter market and have not yet issued their financial statements. FASB calls these organizations “public not-for-profits” and is proposing that they have the option to apply the standard for fiscal years beginning after Dec. 15, 2019, including interim periods within those fiscal years.
FASB also is proposing a deferral for private company franchisors of the effective date for its revenue recognition standard. Private company franchisors would have the option to apply the new revenue recognition standard for annual reporting periods beginning after Dec. 15, 2019, and interim reporting periods within annual reporting periods beginning after Dec. 15, 2020.
“The FASB’s proposal to delay time-sensitive standards would provide a measure of relief to certain companies and organizations focused on the COVID-19 crisis,” FASB Chairman Russell Golden said in a news release. “It’s the first in a series of steps the board is taking to ensure our stakeholders can successfully implement GAAP guidance during this time.”
Comments on the proposal are due May 6 and can be submitted through FASB’s website.
—Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.