FASB Grants One-Year Delay on Revenue Recognition, Lease Standards Implementation
In response to COVID-19, the Financial Accounting Standards Board (FASB) has issued an Accounting Standards Update (ASU) that allows for a one-year effective date deferral for certain private companies and nonprofits that haven’t yet adopted the revenue recognition and lease standards.
The standard extends the due date for applying the new revenue recognition standard for private companies and nonprofits that have not yet applied the standard. The standard is now applicable to annual reporting years beginning after 12/15/2019.
The standard extends the due date for applying the new lease standard for private companies, private nonprofits and public nonprofits that have not yet issued their statements. The standard is now applicable to annual reporting periods beginning after 12/15/21 except for public nonprofits that would need to apply the standard to annual periods beginning after 12/15/19.
This delay is intended to provide near-term relief for certain entities for whom the leases adoption is imminent. Early adoption continues to be permitted.
If an organization has already completed its analyses for the adoption of the standard, they should carefully weigh the impacts of moving forward with adoption versus taking advantage of the delay; which could not only have implications to the financial statements but also on qualitative factors such as lender communications and covenants. Our BMF Advisors are available to discuss options before finalizing a determination.
Visit our COVID-19 Resource Center for information and resources for you and your business.
James E. Merklin?>
CPA/CFF, CFE, CGMA, MAcc
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