Standards Update 6/5/20
The Financial Accounting Standards Board (FASB) regularly issues Accounting Standards Updates (ASUs) to make changes to the FASB Codification, the primary source of Accounting Principles Generally Accepted in the United States (GAAP).
On June 3, 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities (ASU No. 2020-05) to defer the effective dates of certain major accounting standards for which implementation challenges were amplified by disruptions caused by the COVID-19 pandemic. The deferred effective dates are noted below for each of the ASU’s impacted.
- ASU No. 2016-02, Leases (Topic 842) Private companies and private not-for-profits (NFPs) now have a one-year deferral option to apply Topic 842 to fiscal years beginning after Dec. 15, 2021. NFPs 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 that have not yet issued financial statements as of June 3, 2020, now have a one-year deferral option to apply Topic 842 to fiscal years beginning after Dec. 15, 2019.
- ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606)Private companies and NFPs that have not yet issued financial statements or made financial statements available for issuance as of June 3, 2020, now have a one-year deferral option to apply Topic 606 to annual reporting periods beginning after Dec. 15, 2019.
Effective Date and Transition
ASU No. 2020-05 is applicable for Topic 606 and Topic 842 as noted above. Early adoption of Topic 606 and Topic 842 is still permitted.
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