Financial Accounting Standards Board Proposes to Delay Lease Accounting Rule
Tuesday, May 19, 2020
The Financial Accounting Standards Board (FASB) announced a proposed Accounting Standards Update (ASU) that would grant a one-year effective date delay for private companies applying leases and revenue recognition guidance. Comments are due on the proposed ASU by May 6, 2020.The delay would provide near term relief for companies closing in on implementation of the new lease rule who have rapidly approaching year-end dates where the lease rule effective date is imminent. According to FASB, its proposal to delay time-sensitive standards would provide a measure of relief to certain companies and organizations focused on the COVID-19 crisis.
Under the proposal, private companies and private not-for-profit organizations would have the option to apply the new leases standard for fiscal years beginning after December 15, 2021, and to interim periods within fiscal years beginning after December 15, 2022. Public not-for-profit organizations that have not yet issued financial statements would have the option to apply the standard for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.
The proposed effective date deferral for revenue recognition would be limited to private company franchisors. Those stakeholders would have the option to apply the new standard for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020.
The proposed ASU is available at www.fasb.org.