Delays For Three Major FASB Standards A Win For Private Companies and Smaller SEC Filers

Posted by Cory Stewart on Nov 1, 2019 3:54:31 PM

On Wednesday, October 16, 2019, the Financial Accounting Standards Board (“FASB”) unanimously voted to delay effective dates on standards related to accounting for leases, credit losses and hedging.  These delays impact private companies and smaller SEC filers.  The effective dates remain unchanged for larger public entities.

Under the pending Accounting Standards Update (“ASU”), effective dates for the lease accounting and hedge accounting for private companies will be delayed one year to fiscal years beginning after December 15, 2020, while the credit loss effective date would be delayed two years to fiscal years beginning after December 15, 2022.Workplace with tablet pc showing calendar and a cup of coffee on a wooden work table close-up

For public entities, the hedge and lease accounting effective dates remain for fiscal years beginning after December 15, 2018, and the credit loss effective date remains for fiscal years beginning after December 15, 2019, except for smaller reporting companies, whose credit loss effective date would be extended to fiscal years beginning after December 15, 2022.

Early-adoption options for all three standards remain unchanged.

Bottom Line: This delay is largely a win for private companies and smaller SEC filers, as they will have the benefit of learning from the implementation successes and pitfalls experienced by larger public companies.  Companies should continue to review the impact of the standards updates on their own businesses and consult their accounting firms with questions regarding implementation or best practices.

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