Private company GAAP accounting implementation dates delayed for revenue recognition and leases
Two accounting standards which can be costly to implement and have given many business owners angst have received delayed effective dates.
The first is the Revenue Recognition Standard, which many private companies have already adopted because the current effective date was for annual reporting periods beginning after Dec. 15, 2018. The Financial Accounting Standards Board (FASB) voted on Wednesday, May 20, 2020 to delay the effective date of the Revenue Recognition Standard by one year for all non-public companies who have not yet issued financial statements. Now, it will take effect for annual reporting periods beginning after Dec. 15, 2019, and interim reporting periods within annual reporting periods beginning after Dec. 15, 2020. A final ASU will be issued soon which is expected to give nonpublic companies, who have not already issued their financial statements, the option of adopting the Revenue Recognition Standard on the current implementation date or to delay implementation for one year.
The second delay is for lease accounting. FASB also affirmed the decision to delay the effective date for the Lease Accounting Standard for non-public companies and not-for-profit entities until fiscal years beginning after December 15, 2021, with early adoption permitted.
If your business would like assistance implementing Revenue Recognition or Lease Accounting Standards, please contact a ShindelRock accounting professional.