Will private companies and not-for-profit organizations get a longer window to adopt lease accounting changes? No, says the Financial Accounting Standards Board (FASB).
On November 10, the FASB emphatically ruled against extending the effective date any further for private entities in a unanimous vote. Private entities will need to get to work on their ASC 842 implementation, which applies to fiscal years beginning after Dec. 15, 2021, and interim periods beginning after Dec. 15, 2022. Therefore, entities that are lessees reporting on a calendar year basis will be required to recognize assets and liabilities for almost all leases on their balance sheet in their Dec. 31, 2022 financial statements.
The ruling ends any speculation that the effective date might be adjusted yet again for private entities. ASC 842’s effective date had been bumped twice before: after public companies had expressed concern about the time it took to adopt the changes in 2019, and again in 2020 because of the disruption brought by the COVID-19 pandemic.
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Published on November 12, 2021