FASB issued an update Wednesday that delayed the effective dates of its revenue recognition and lease accounting standards for certain entities in response to the coronavirus pandemic.
The board issued an Accounting Standards Update that permits private companies and not-for-profits that have not yet applied its new revenue recognition standard to implement the new rules for annual reporting periods beginning after Dec. 15, 2019, and interim reporting periods within annual reporting periods beginning after Dec. 15, 2020.
The lease accounting effective date was deferred for certain organizations that have not yet applied the new guidance:
- Private companies and private not-for-profits may apply the new standard for fiscal years beginning after Dec. 15, 2021, and to interim periods within fiscal years beginning after Dec. 15, 2022.
- Public not-for-profits — defined as not-for-profits that have issued or are conduit obligors for securities that are traded, listed, or quoted on an exchange or over-the-counter market — that have not yet issued or made available to issue financial statements reflecting the new lease accounting guidance may apply the standard for fiscal years beginning after Dec. 15, 2019, including interim periods within those fiscal years.
The option to delay the implementation of these two highly significant standards is intended to ease the pressure on financial statement preparers in the high-pressure economic atmosphere created by the pandemic.
“We believe the deferral will provide these stakeholders a measure of relief during this unprecedented time,” FASB Chairman Russell Golden said.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the pandemic, visit the JofA’s coronavirus resources page.
— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.