FASB Issues Delay to Effective Dates of ASC 606 and ASC 842 for Private Companies and Not-For-Profit Entities

On Wednesday, June 3, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities. This ASU extends one-year delays to certain entities to provide immediate, near-term relief for whom these standards are either currently effective or imminently effective.

Resulting Effective Dates

ASC Topic 606, Revenue from Contracts with Customers, including subsequent amendments, for private companies:

  • One-year deferral of effective date for private companies that have not yet issued their financial statements or made their financial statements available for issuance to annual reporting periods beginning after Dec. 15, 2019, and interim reporting periods with annual reporting periods beginning after Dec. 15, 2020.
  • These companies still have the option of early adopting ASC 606 on the previous implementation date.

ASC Topic 842, Leases, including subsequent amendments:

  • One-year deferral of effective date for private companies and private not-for-profits to annual reporting periods beginning after Dec. 15, 2021, and interim periods with annual reporting periods beginning after Dec. 15, 2022.
  • One-year deferral of effective date for public not-for-profit entities that have not yet issued financial statements reflecting the adoption of Topic 842 to fiscal years beginning after Dec. 15, 2019, including interim periods within those fiscal years.

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