On Wednesday, April 8th the Financial Accounting Standards Board (FASB) unanimously voted to defer the effective date for Topic 842, Leases by one year due to the expected effects of Coronavirus (COVID-19). There will be 15-day comment period with expectation of an ASU issued in early May.
Currently, public not-for-profits (NFPs) with conduit debt are required to adopt the leasing standard for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Private not-for-profits and private companies are required to adopt for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021.
The Board’s proposed one-year deferral effective dates are as follows:
Public NFPs (conduit debt obligors) – fiscal years beginning after December 15, 2019
Private NFPs and Private Companies – fiscal years beginning after December 15, 2021
This one-year delay will provide much needed relief for entities that have not yet issued financial statements. Early adoption will be permitted.
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