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.
For a crash course on the key standard changes, tune into our webinar, or contact a member of our team.
Published on November 12, 2021
© Copyright CBIZ, Inc. and MHM. All rights reserved. Use of the material contained herein without the express written consent of the firms is prohibited by law. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.
CBIZ MHM is the brand name for CBIZ MHM, LLC, a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of publicly-traded and privately-held companies. CBIZ MHM, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ). MHM (Mayer Hoffman McCann P.C.) is an independent CPA firm that provides audit, review and attest services, and works closely with CBIZ, a business consulting, tax and financial services provider. CBIZ and MHM are members of Kreston International Limited, a global network of independent accounting firms. This publication is protected by U.S. and international copyright laws and treaties. Material contained in this publication is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their organization.