The Financial Accounting Standards Board (FASB) met on April 8, 2020 to discuss deferral of effective dates for certain entities. The meeting was to address the Board’s concerns about the global effect of the Coronavirus (COVID-19) pandemic on stakeholders and to provide potential relief by deferring the effective dates of certain Accounting Standards Updates.
The Board approved a one-year deferral for Accounting Standards Update No. 2016-02, Leases (Topic 842). The deferral moves the effective date of the document for private companies and nonprofits to annual reporting periods beginning after December 15, 2020, and interim periods within the fiscal years beginning after December 15, 2021. The deferral would also include public nonprofits that have not yet issued financial statements.
Also, the Board approved a one-year deferral for Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), including subsequent amendments for franchisors that are not public business entities. The deferral moves the effective date of the document to annual reporting periods beginning after December 15, 2020, and interim periods with annual reporting beginning after December 1, 2021.
The Board voted unanimously (7-0) to move forward to issue a Statement to defer the effective dates. Upon issuance, the Statement will be open for public comment for 15 days.
The Governmental Accounting Standards Board (GASB) has expressed similar concerns concerning the impact of the COVID-19 pandemic on its stakeholders, and on March 26, 2020, the GASB “added a project to its current technical agenda to consider postponing all Statement and Implementation Guide provisions with an effective date that begins on or after periods beginning after June 15, 2018.” This would include GASB Statement 87, Leases and other pronouncements.
On April 6, 2020, the Board reiterated its concerns about the stakeholder impact of COVID-19 and announced that it would be “reviewing a proposed Statement that would postpone effective dates of the provisions in certain documents [including GASB 87] and will consider releasing it for public comment during the April 14, 2020 teleconference meeting.”
This article reflects our views at the time this article was written and should be used as reference only. We recommend that you talk to your Warren Averett advisor, or another business advisor, for the most current information or for guidance specific to your organization.