FASB Votes to Delay Effective Date for Major Accounting Standards

Yesterday, the Financial Accounting Standards Board (FASB) voted to approve proposals to amend the effective dates for several major Accounting Standards Updates (ASUs). The FASB voted to issue final ASUs to amend the effective dates of the following ASUs:

ASU No. 2016-02, Leases (Topic 842)

• For public business entities, not-for-profit entities that have issued, or are conduit bond obligors for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market, and employee benefit plans that file financial statements with the U.S. Securities and Exchange Commission (SEC), ASU No. 2016-02 was already effective for fiscal years beginning after Dec. 15, 2019, and thus, the effective date will remain unchanged.
• For all other entities ASU 2016-02 will be effective for fiscal years beginning after Dec. 15, 2020. Early application is allowed.

ASU No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts

• For public business entities that meet the definition of a SEC filer, excluding eligible smaller reporting companies, ASU No. 2018-12 is effective for fiscal years beginning after Dec. 15, 2021.
• For all other entities, ASU No. 2018-12 is effective for fiscal years beginning after Dec. 15, 2023.

ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities

• For entities other than public business entities, ASU 2017-02 is effective for fiscal years beginning after Dec. 15, 2020. Early application is allowed.

ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

• For public business entities that meet the definition of an SEC filer, excluding entities eligible to be SRCs as defined by the SEC, ASU No. 2016-13 is effective for fiscal years beginning after Dec. 15, 2019.
• All other entities, ASU No. 2016-13 is effective for fiscal years beginning after Dec. 15, 2022.

Due to the FASB’s review process the related ASUs are expected to be issued as final in mid-November.

For questions on how to implement these new accounting standards at your organization, please contact your KSM advisor.