In response to uncertainties surrounding COVID-19, the Financial Accounting Standards Board (FASB) voted on Wednesday, May 20, 2020, to extend the effective date for certain Accounting Standards Updates (ASU). Following is a summary of the FASB’s actions from that meeting.
Revenue Recognition ASU
The effective date of the FASB revenue recognition ASU has been extended by one year for all nonpublic entities that have yet to issue their financial statements. This is expected to give nonpublic entities the option of adopting the revenue recognition standard on the current implementation date or deferring implementation for one year.
The FASB also reaffirmed its decision to amend the effective date of its lease accounting standard for private companies and not-for-profits. Early adoption is still permitted. The effective date for these entities will be for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.
Unlike private not-for-profits, for public not-for-profits (i.e., those not-for-profits that have issued or are conduit obligors for securities that are traded, listed, or quoted on an exchange or an over-the-counter market) that have not yet issued financial statements or made them available for issuance, the effective date will be fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Further guidance for public not-for-profits that issue financial information, rather than financial statements, was also provided.
If you have any questions about the ASUs and their effective dates, or the applicability of these FASB actions on your specific circumstances, consult a THF Certified Public Accountant (CPA) here.