Proposed Accounting Standards Delay Could Affect Private Companies and Not-for-Profits
The Financial Accounting Standards Board (FASB) voted on July 17, 2019 to issue a proposal for public comment that would delay some of its major accounting standards, including leases, for private companies, not-for-profits and small reporting companies.
The proposal would give private companies, not-for-profits and small reporting companies an extra year to implement standards recently created or amended standards related to credit losses, leases, and hedging standards. If approved, the effective date for the lease standards would get pushed back to calendar year 2021, giving another year for companies to get processes in place.
FASB is considering a revised philosophy on effective dates for private companies, not-for-profits and small reporting entities pushing their effective dates two years past the public company effective dates. FASB stated they would only do that for major standard changes.
How This Could Affect You
The proposed delay would give private companies and not-for-profits the benefit of learning how public companies are implementing the standards. Having more time in-between the two major standards would help these organizations take their time to have a quality implementation.
The proposal will undergo a 30-day public comment period in August. If the comments are generally favorable, the board will issue a final document. Anders routinely provides feedback and comments to FASB, AICPA, and other standard setters on proposals and exposure drafts that we feel will have an impact on our clients.
If you have any questions about the accounting standards implementation for your company or not-for-profit, contact an Anders advisor.