As you are probably now aware, the new lease accounting standard has been delayed. In July, the Financial Accounting Standards Board (FASB) voted to propose delaying implementation of the new lease accounting standard for non-public companies (which include private companies and nonprofit organizations) for one year. Based on this proposal, the new standard would become effective for non-public companies in January 2021 and would be reported in December 31, 2021, financial statements.
FASB’s proposal is available for public comment through September 16, 2019, at which point FASB will finalize the new effective date.
The delay reflects a mindset shift by FASB and is the result of the board gaining a greater understanding of the challenges nonpublic companies and nonprofits encounter when adopting major accounting updates. Under this philosophy change, FASB intends to extend and simplify how effective dates are staggered between large public companies and all other entities (which include private companies, and nonprofit organizations).
Yeo & Yeo will continue to provide updates on the proposed change in the accounting standard. If you have questions, please contact your local Yeo & Yeo office.