COVID-19: FASB is to Propose Another Delay for Leasing Standard
In its April 8, 2020 meeting, the FASB revealed its plans to help relieve some concerns of companies contending with the effects of the global COVID-19 pandemic. Among other actions, the FASB plans to propose the extension of the effective date for adoption of the new lease accounting standard for private companies and not-for-profit organizations for an extra year.
- For private companies, ASC Topic 842 will now be effective for annual reporting periods beginning after December 15, 2021, and for interim periods beginning after December 15, 2022.
- For public not-for-profit entities who have not yet issued their financial statements, the new effective date for adopting Topic 842 will be for fiscal years beginning after December 15, 2019.
The FASB also discussed a technical question regarding accounting for lease concessions that companies have received as a result of the COVID-19 outbreak. Based on its discussions on April 8, the FASB will offer an election to simplify the accounting for those concessions such that the company can forego the analyses that would be required if the concessions were to be considered a lease modification. The FASB will be issuing a Question-and-Answer document to further detail its answer to this question.
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