On May 20, 2020, the Financial Accounting Standards Board (FASB) voted to implement a one-year delay on the effective date of its Revenue Recognition Standard (ASC 606) for all non-public entities that have not yet issued their financial statements. The decision was based on the financial challenges faced by private companies who are currently focused on surviving the coronavirus pandemic, with FASB stating, “they may not have the technology or resources to effectively implement the standard”.
FASB also reaffirmed its decision to amend the effective date of its Lease Accounting Standard (ASC 842) for private companies and private not-for-profit organizations, which will now be effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.
For public not-for-profit organizations, the leasing standard would be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.
Early adoption would continue to be allowed for both the Revenue Recognition Standard and the Lease Accounting Standard.
The FASB also considered a deferral to the standard related to not-for-profit entities (ASU 2018-08), but ultimately did not defer the effective date of that standard.
We expect to see more guidance released by FASB in the coming weeks, and will keep you apprised of any additional changes. If you have any questions about the updated guidance, or how to proceed with your financial statements, please don’t hesitate to contact us at firstname.lastname@example.org, or visit our COVID-19 Resource center at www.crrcpa.com/covid19 for the latest alerts, updates and impacts.
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