United States

FASB to defer effective dates for leases, CECL, hedging and insurance

FINANCIAL REPORTING INSIGHTS  | 

At its meeting on July 17, 2019, the Financial Accounting Standards Board (FASB) decided to propose deferring the effective dates for certain guidance in its Accounting Standards Codification (ASC) for certain entities. The following summarizes the preexisting effective dates by type of entity and the changes (if any) to the effective date for each type of entity to be proposed by the FASB:

Guidance affected

Type of entity

Effective dates and proposed changes

ASC 326, Financial Instruments—Credit Losses

SEC filers (as defined in the ASC) other than smaller reporting companies (as defined by the Securities and Exchange Commission [SEC])

No change: Effective date for an SEC filer that is not a smaller reporting company with a calendar year end continues to be its quarter beginning January 1, 2020.

Smaller reporting companies

Three-year deferral: Effective date for a smaller reporting company with a calendar year end will change from its quarter beginning January 1, 2020 to its quarter beginning January 1, 2023.

All entities other than SEC filers, which includes private companies, all not-for-profit organizations (even those 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 all employee benefit plans (even those that file financial statements with the SEC)

One- or two-year deferral: Effective date for an entity other than an SEC filer with a calendar year end will change from its year (and interim period, if applicable) beginning January 1, 2021 or 2022 (as otherwise required) to its year (and interim period, if applicable) beginning January 1, 2023.

ASC 842, Leases

Public business entities (PBEs) (as defined in the ASC)

No change: Effective date for a PBE with a calendar year end continues to be its quarter beginning January 1, 2019.

All entities other than PBEs

One-year deferral: Effective date for an entity other than a PBE with a calendar year end will change from its year ending December 31, 2020 to its year ending December 31, 2021.

Amendments to ASC 815, Derivatives and Hedging

PBEs

No change: Effective date for a PBE with a calendar year end continues to be its quarter beginning January 1, 2019.

All entities other than PBEs

One-year deferral: Effective date for an entity other than a PBE with a calendar year end will change from its year ending December 31, 2020 to its year ending December 31, 2021.

Amendments to ASC 944, Financial Services—Insurance

SEC filers other than smaller reporting companies

One-year deferral: Effective date for an SEC filer that is not a smaller reporting company with a calendar year end will change from its quarter beginning January 1, 2021 to its quarter beginning January 1, 2022.

Smaller reporting companies

Three-plus year deferral: Effective date for a smaller reporting company with a calendar year end will change from its quarter beginning January 1, 2021 to its year ending December 31, 2024.

All entities other than SEC filers

Two-year or three-plus year deferral: Effective date for an entity other than an SEC filer with a calendar year end will change from its quarter beginning January 1, 2021 or year ending December 31, 2022 (as otherwise required) to its year ending December 31, 2024.

 

For these changes to take effect, the FASB must issue the proposed ASU for comment, redeliberate its conclusions based on the comments received and issue a final ASU. To stay updated on developments regarding these activities, subscribe to Financial Reporting Insights.

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