Following last month’s proposal to defer the effective date of two standards for private companies and nonprofit organizations, the Financial Accounting Standards Board (FASB) voted to delay the effective dates of revenue recognition and leases standards on May 20. The standards extension comes as a response to complications caused by the coronavirus pandemic. A recent article from Accounting Today examines the history of delays for these two items.
This is not the first time that the effective dates for revenue recognition have been extended. The revenue recognition standard was initially supposed to go into effect in 2017 for public companies and 2018 for private companies. In 2015, FASB extended the effective dates to 2018 for public companies and 2019 or 2020 for nonprofits (varies with the nonprofit’s reporting period).
Similarly, lease standards have also been delayed prior to this year. While the standards took effect for public companies at the beginning of last year, FASB had already delayed the effective date for private companies and nonprofits to the beginning of 2020. As of Wednesday’s vote, now the leases standard for private companies and nonprofits will be effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022.
For further details, click here to read the Accounting Today article in full.