FASB Declines to Extend Nonpublic Lease Accounting Standard Effective Date
Private companies and not-for-profits will not see further relief from the effective date of FASB’s new lease accounting standard after the board voted unanimously to reject a request for a two-year extension that was submitted by the Pennsylvania Institute of CPAs (PICPA).
The current effective date for nonpublic entities is for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The standard was issued in 2016, but its effective dates for nonpublic entities previously were extended in two one-year deferrals.
In November 2019, a deferral was issued for nonpublic entities in recognition of the challenges encountered in the implementation of a major standard. The second deferral for nonpublic entities, in June 2020, was issued because of disruptions caused by the coronavirus pandemic.
Implementing FASB’s lease accounting standard will require businesses to invest considerable time and resources in gathering the information required for reporting.
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