Insights

FASB Votes to Delay Effective Dates for Accounting for Leases

Effective dates will be delayed for private companies and certain other entities for FASB’s standards on accounting for leases after a unanimous vote by FASB.

Under the Accounting Standards Update (ASU), effective dates for the lease accounting, will be affected as follows:

1. SEC filers: The lease accounting effective dates would remain for fiscal years beginning after December 15, 2018.
2. All other public business entities: The lease accounting effective dates would remain for fiscal years beginning after December 15, 2018. The effective date of fiscal years beginning after December 15, 2018, for lease accounting would also apply to employee benefit plans that file or furnish financial statements with or to the SEC as well as not-for-profit entities that have issued or are conduit bond obligors for securities that are traded, listed, or quoted on an exchange or over-the-counter market.
3. Private companies and all others: The lease accounting effective dates would be delayed one year to fiscal years beginning after December 15, 2020.

Early-adoption options for the standard will remain unchanged.

FASB members said during a board meeting that one of the advantages of the delay is that it will allow preparers with limited resources to learn from the implementation performed by large public companies that possess more staffing and resources.

FASB began considering the delays in response to concerns from overwhelmed preparers. Many of those concerns were voiced in a letter the AICPA’s Technical Issues Committee sent FASB in May requesting a delay in the effective date for private companies for the lease accounting standard.