Stay tuned for more information from your Cohen & Company … Many companies … Other public business entities, including smaller reporting companies, would see the effective date move from January 2021 to January 2024. In response to COVID-19, the Financial Accounting Standards Board has proposed the deferral of the new lease accounting standard effective date for certain entities: For private companies, including private not-for-profit entities, to fiscal years beginning after December 15, 2021, and interim periods beginning after December 15, 2022. 3 . FASB Finalizes New Effective Dates for Leases, CECL, Hedging & Insurance . In August 2019, the FASB issued a proposed Accounting Standards Update that would defer the effective date of ASC 842 for private companies, not-for-profit organizations and employee benefit plans that do not file or furnish financial statements with or to the SEC. In April, U.S. accounting rule maker, the Financial Accounting Standards Board (FASB), decided to offer private companies until 2022 to comply with major new lease accounting rule, ASC 842, which was supposed to go into effect next year, in 2021.The decision to issue a delay until 2022 came in response to the outbreak of COVID-19. The insurance contracts standard would be delayed for both public and private companies, as well as for nonprofits. CECL, ASU 2016-13 **Includes all other PBEs (including SRCs), private companies, NFPs and EBPs . A nonpublic organization is not required to apply the new revenue standard in interim periods within the year of adoption. The delay means those companies now have an extra year to adopt the new lease accounting rules, subject to the FASB issuing a formal proposal for public comment before finalizing the new effective dates. Leases. For those entities, the effective date of Topic 842 will be for fiscal years beginning after December 15, 2021, and interim periods within fiscal … For public companies, the new leasing standard will be effective for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. A major challenge in implementing the new lease standard is the amount of work needed to review lease contracts and identify what qualifies as a lease. For Hedging, bucket one remains “PBEs” because this standard is currently effective for these entities. The new lease accounting standard was issued in 2016 and was to be effective for private companies in 2020 but was already delayed once in October of 2019. Why is a New Lease Accounting Standard … Thus, for a calendar year company, it would be effective January 1, 2019. The FASB decided to extend the effective date of Topic 842 for private companies and private not-for-profit entities. This is a one-year deferral of the effective date. For private companies, the standard will be effective the following year, for annual periods beginning after December 15, 2019. Once final, the new leases standard is expected to be effective for private companies for annual reporting periods beginning after December 15, 2020 (2021 calendar year). Hedging, ASU 2017-12. The deferral moves the effective date for SEC filers from January 2021 to January 2022. Early adoption will be permitted. For public companies, the ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For nonpublic companies, this update is effective for the 2020 calendar year. The existing Financial Accounting Standards Board (FASB) lease guidance, dating back to 1976, will be replaced by FASB Accounting Standards Update (ASU) 2016-02.