FASB to Propose Delaying Effective Dates for Lease Accounting
FASB plans to propose delaying effective dates for companies implementing the new lease accounting standards. The plan also called for delays in the effective dates for certain companies for accounting for credit losses, hedging, and long-duration insurance contracts.
Accounting Standards Update No. 2016-02, Leases (Topic 842) will require that companies record nearly all leases on the balance sheet. These leases would be accounted for as assets and liabilities on the balance sheet – on the asset side as “right-of-use assets” and on the liability side as lease liabilities; on the income statement, depreciation and interest expense would be recognized instead of rent expense.
The proposed new effective date for lease accounting for calendar-year-end preparers that are not public business entities would be January 1, 2021. The effective date for calendar-year-end public business entities, employee benefit plans, and not-for-profit conduit bond obligors is January 1, 2019, and would remain unchanged.
The early adoption options remain unchanged.