FASB Votes to Delay Effective Dates for Major Standards
FASB recently voted unanimously to delay effective dates for private companies and certain other entities for standards on accounting for leases, credit losses and hedging. A formal written ballot by the FASB board is expected to take place in November, and then the Accounting Standards Update (ASU) will be issued.
For SEC filers, hedge and lease accounting effective dates would remain for fiscal years beginning after Dec. 15, 2018, and the credit loss effective date would remain for fiscal years beginning after Dec. 15, 2019. Smaller reporting companies’ credit loss effective date would be extended to fiscal years beginning after Dec. 15, 2022.
For all other public business entities, hedge and lease accounting effective dates would remain for fiscal years beginning after Dec. 15, 2018, and the credit loss effective date would change to fiscal years beginning after Dec. 15, 2022. The effective date of fiscal years after Dec. 15, 2018 for lease accounting would also apply to employee benefit plans that furnish financial statements to the SEC and not-for-profits that have issued or are conduit bond obligors for securities traded, listed, or quoted on an exchange or over-the-counter market.
For private and all other companies, hedge and lease accounting effective dates would change to fiscal years beginning after Dec. 15, 2020, and the credit loss effective date would change to fiscal years beginning after Dec. 15, 2022. Early adoption options for all three standards will remain unchanged.
Additionally, FASB voted to align the effective date of ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment with the amended dates for credit losses.
FASB also voted to delay the effective date of its standard for accounting for insurance companies issuing long-term insurance contracts. The new effective date for SEC filers, excluding eligible smaller reporting companies, will be fiscal years beginning after Dec. 15, 2021 and interim periods within those fiscal years. For all others, the effective date will be fiscal years beginning after Dec. 15, 2023 and interim periods within fiscal years beginning after Dec. 15, 2024.
