FASB Gives Companies More Time to Implement Some of the Major Standards
Published October 17, 2019
The Financial Accounting Standards Board (FASB) voted yesterday to defer effective dates of standards for leases, credit losses, hedging and long-duration insurance contract standards to give private companies, nonprofits and small public companies more time to implement the new standards.
The amended effective dates apply to the following standards:
- Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Credit Losses)
- Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Hedging)
- Accounting Standards Update No. 2016-02, Leases (Topic 842) (Leases)
- All public entities that are SEC filers (not including entities eligible to be a smaller reporting company) are defined by the SEC for the fiscal years beginning after December 15, 2019. However, for calendar-end companies, it will be January 1, 2020.
- All other entities, credit losses will be effective for fiscal years beginning after December 15, 2022.
- Hedging will be effective for entities other than public business entities for fiscal years beginning after December 15, 2020 and effective January 1, 2020 for calendar year-end companies.
- The existing effective date will remain for Public Business Entities, for fiscal years beginning after December 15, 2018 and is effective January 1, 2019 for calendar year-end companies.
- The effective date will remain for all public business entities, not-for-profit conduit bond obligors and employee benefit plans that file or furnish financial statements with the SEC. It will apply for fiscal years beginning after December 15, 2018 and will be effective January 1, 2019 for calendar year-end companies.
- All other entities will be deferred by an additional year, beginning December 15, 2020 and January 1, 2021 for calendar year-end companies. Early adoption will be allowed.
Speaking with a professional is highly recommended to all organizations who anticipate changes. For more information visit our website at www.mcmcpa.com.
*Source: Financial Accounting Standards Board.