Private Company Relief – FASB Approves Delay of Effective Dates for Changes in Lease Accounting and Credit Loss Accounting
In our previous coverage of the Financial Accounting Standards Board (FASB) proposal to delay Changes in Lease Accounting and Credit Loss Accounting in July of 2019, we reported that the FASB voted in favor of one-year delays in the effective dates for non-public entities.
At their most recent meeting in October of 2019, the FASB approved these delays for non-public entities to implement the new standards on lease accounting and accounting for credit losses. The delay results in the lease standard being effective for years beginning after December 15, 2020 (2021 calendar year-ends), and the credit loss standard being effective for years beginning after December 15, 2022 (2023 calendar year-ends). These delays will be formally released, and effective, as accounting standard updates (ASU) in November of 2019.
Not-for-profit entities who are conduit debt obligors (e.g. entities obligated to repay municipal bonds issued on their behalf), and Non-SEC filers which are considered public business entities, are not provided a delay in the accounting for leases. This includes, but is not limited to, for-profit conduit debt obligors or broker dealers. The lease standard for these entities remains effective for years beginning after December 15, 2018 (2019 calendar year-ends).
These delays will provide great help to non-public companies in their implementations. The delays will provide time to understand the impact of the standards and put in place the technology solutions and processes necessary to provide accurate accounting and disclosures.
To learn how these standards will impact your business, or to begin working on implementation plans please email me here, call me at 513-241-8313, or have a member of your Barnes Dennig client service team reach out to you here.