Leasing and Other Standards Delayed by FASB
The Financial Accounting Standards Board voted yesterday, Wednesday, October 16, to approve the delay of the effective date of the lease standard. The intention for the delay is to give private companies and not-for-profits more time to transition and implement the new rules. With public companies implementing this new standard in 2019, this will give additional time for private companies and not-for-profits to learn how to best comply with the new standard.
FASB has also voted to delay the effective dates of its credit losses and hedging and long-duration insurance contracts standard.
Here are the main updates to the standards’ effective dates to be aware of:
- The hedging and leasing standards have taken effect for public companies as of January 2019. The effective date for private companies and not-for-profits has been moved from January 2020 to January 2021.
- The credit losses standard has now been pushed to January 2023 for smaller reporting companies, private companies, not-for-profits and all other public business entities.
- The insurance contracts standard for SEC filers has been moved from January 2021 to January 2022. The effective date for other public business entities, including smaller reporting companies and not-for-profits has been moved from January 2022 to January 2024.
FASB expects to issue documents on the changes in mid-November of 2019.
While the lease standard has been delayed, it remains important to begin the transition as soon as possible. Despite their large resources, public companies have been facing greater than expected difficulties complying with the new standard.
Should you have any questions with the upcoming lease standard transition, please reach out to a Sax advisor for guidance. We can be reached at (973) 472-6250 or www.saxllp.com.