FASB Issues Proposal to Delay New Standards

On August 15, 2019, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) that would grant private companies, non-for-profit organizations, and certain small public companies extra time to implement the following new standards.

ASU 2016-02, Leases (Topic 842)

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326)

ASU 2017-12, Derivatives and Hedging (Topic 815)

The proposal comes after FASB voted earlier this month to give private companies, nonprofits and smaller reporting companies an additional year to implement the standards. In the proposed update, FASB outlines philosophy for the effective dates for major standards between larger public companies and all other entities, including private companies, smaller public companies, non-for-profit, and employee benefit plans. The move comes in response to complaints from many companies and accountants about the difficulties of implementing the new standards, especially so soon after implementation of the revenue recognition standard.

Based on that philosophy, the FASB proposes to amend the effective dates for Leases, Credit Losses and Hedging according to the following chart, which assumes a calendar-year end:

Refer to our previous update on the implementation of leases standard at the link below:

On Your Mark, Get Set, Go!- Preparing to implement the new Lease Accounting Standard 

McConnell & Jones knows that a delay in implementation is be the biggest risk of all and we work to deliver tailored solutions to efficiently address each of our clients’ needs when transitioning to the new standard.  Contact our team today with your questions – we’re ready to help.

 Johnson Olatunji, CPA
Senior Assurance Manager
Public Assurance Services

Marlon Williams, CPA
Assurance Partner
Public Assurance Services

For additional information:

FASB InFocus Overview

Proposed Accounting Standard Update