The Financial Accounting Standards Board formally delayed the effective date of the leasing and revenue recognition standards for select entities. Its Accounting Standards Update 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, provides some relief for private organizations and certain public not-for-profit organizations that are currently working through these complex accounting changes. ASU 2020-05 came out of a response to the disruption from the COVID-19 pandemic.
Entities that have not issued (or made available for issuance) financial statements that include the adoption of Topic 606 will be able to elect to defer adoption of Topic 606 until the annual period beginning after Dec. 15, 2019. The effective date for Topic 842 for non-public business entities and private not-for-profit entities has been pushed until the period beginning after Dec. 15, 2021. Public not-for-profit entities — those that have issued or are conduit debt obligors for securities that are traded, listed, or quoted on an exchange or over-the-counter (OTC) market — will be able to adopt Topic 842 for the period beginning after Dec. 15, 2019. For a full recap of what the provisions entail, please see our earlier article here. Not-for-profit organizations have some slightly different considerations, a longer discussion of which can be accessed here.
Please contact a member of our team about any questions or concerns you may have about the implications of the effective date changes.
Published on June 03, 2020