FASB directs staff to draft final ASU delaying revenue recognition and lease standard effective dates

During the Financial Accounting Standards Board (FASB) meeting on May 20, 2020, the FASB made tentative decisions to delay the effective dates of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) and ASU No. 2016-02, Leases (Topic 842) for certain entities. FASB expects to issue a final ASU related to the proposed delays prior to the end of the second quarter of 2020. The final ASU is expected to change the effective dates of Topics 606 and 842 as follows:

Revenue from Contracts with Customers (Topic 606)

For all entities that have not yet adopted Topic 606 (i.e., have not yet issued, or made available for issuance, financial statements reflecting the adoption of Topic 606), the amended effective date would be for annual reporting periods beginning after Dec. 15, 2019 (i.e., Jan. 1, 2020, for calendar year-ends). Early adoption would continue to be permitted.

FASB decided to retain the effective date of ASU No. 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made.

Leases (Topic 842)

For private companies and private not-for-profit entities, the amended effective date would be for fiscal years beginning after Dec. 15, 2021 (i.e., Jan. 1, 2022, for calendar year-ends). For not-for-profit entities that have issued or are conduit bond obligors for securities that are traded, listed or quoted on an exchange or an over-the-counter market, and which have not yet issued or made available for issuance financial statements reflecting the adoption of Topic 842, the amended effective date would for be fiscal years beginning after Dec. 15, 2019 (i.e., Jan. 1, 2020, for calendar year-ends). Early adoption would continue to be permitted.