On May 20, 2020, the Financial Accounting Standards Board (FASB) voted to delay the effective date of revenue recognition (ASC 606) and lease (ASC 842) standards for all private companies. The new effective dates (based on calendar years) are as follows:
- Revenue recognition for private companies and nonprofits – December 2020. This means for December 31, 2019 financials not yet issued, and for fiscal year 2020 year end financials, you have a one-year delay.
- Leases for private companies and nonprofits without conduit debt – December 2022. (Nonprofit conduit debt obligors extended to December 2020.) This is the second extension for the lease standard.
The original proposal issued in April was for a delay of revenue recognition standards for private company franchisors only. So the final decision released was a surprise to all of us in the profession. The new standard is expected to be issued by the FASB in June.
Until then, you can watch the short FASB meeting discussing this vote. You can also visit our resource pages to learn more about these standards. And as always, contact James Moore’s assurance services CPAs to see how these requirements affect your organization.
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