FASB votes to delay effective dates for upcoming accounting standards
The delay in effective dates for four major accounting standards provides welcome relief, but it’s important for entities to take advantage of the additional time to ensure successful implementation.
On Oct.16, 2019, the FASB voted to defer the effective dates for four major accounting standards; leases, credit losses, derivatives and hedging, and long-duration insurance contracts. During the meeting, the Board indicated they plan to use the effective dates that were included in the exposure draft for these standards. The planned effective dates for calendar year-end companies are listed below, and early adoption will continue to be allowed.- Lease accounting:
- Public business entities, employee benefit plans, and conduit bond obligors (no change): January 2019
- All other entities: January 2021
- Derivatives and hedging:
- Public business entities (no change) Jan. 2019 Public business entities (no change): January 2019
- All other entities: January 2021
- Accounting for credit losses:
- SEC filers, excluding smaller reporting companies (SRCs): January 2020
- All other entities: January 2023
- Long-duration insurance contracts:
- SEC filers, excluding SRCs: January 2022
- All other entities: January 2024
In addition to the changes identified above, based on stakeholder feedback, the Board plans to amend the effective date of ASU 2017-04 Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment to align with the amended effective dates for the Accounting for Credit Losses (as noted above).
While this delay will provide relief to many entities, it’s important to stress that the delayed effective dates are in response to implementation being more time-consuming and costly for preparers than originally anticipated, based on feedback received from early implementers. Therefore, it’s important that entities take advantage of the additional time to ensure successful implementation of these standards.
