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KSM Blog | Katz, Sapper & Miller CPA

FASB Proposes Delays on Accounting Standard Changes

Posted 4:01 PM by

On July 17, 2019, the Financial Accounting Standards Board (FASB) voted to have its staff prepare an exposure draft to delay the effective dates for accounting standard changes on leases, credit losses, and hedging. The FASB received several requests to provide relief as smaller companies are dealing with the highly challenging implementation of the revenue recognition standard. The FASB has also requested that its staff prepare a second exposure draft to propose new effective dates for long-duration insurance contracts. Upon approval by the FASB, the exposure drafts are expected to be issued with 30-day comment periods. The FASB indicated a desire to prioritize the exposure draft for leases, credit losses, and hedging because of the quickly approaching effective dates for these standards.

Below is a summary of the FASB’s proposed changes:

  • Lease accounting: The new effective date for calendar year-end companies that are not public business entities would be Jan. 1, 2021. This change would push the effective date for lease accounting back one year from the original effective date for private companies. The effective date for calendar year-end public business entities, employee benefit plans, and not-for-profit conduit bond obligors is Jan. 1, 2019, and would remain unchanged since the date has already passed.
  • Accounting for credit losses: The effective date for calendar year-end Securities and Exchange Commission (SEC) filers, excluding smaller reporting companies as defined by the SEC, would remain Jan. 1, 2020. The proposed new effective date for all other calendar year-end companies would be Jan. 1, 2023. This change would extend the effective date for smaller reporting companies, private companies, and other non-SEC filers.
  • Derivatives and hedging: The effective date for calendar year-end public business entities is Jan. 1, 2019, and would remain unchanged since this date has already passed. The proposed new effective date for calendar year-end companies that are not public business entities would be Jan. 1, 2021. This pushes the effective date back one year for private companies.
  • Long-duration insurance contracts: The new effective dates would be Jan. 1, 2022, for calendar year-end public business entities and Jan. 1, 2024, for all other entities with a calendar year-end.

The FASB did decide to leave early adoption options unchanged in each of the standards noted above.

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

Ron Smith 
Partner
317.580.2078
rsmith@ksmcpa.com

 

Amanda Horvath
Director
317.452.1020
ahorvath@ksmcpa.com

 

Jessica Boicourt
Manager
317.452.1022
jboicourt@ksmcpa.com

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