FASB Proposes Delay on Implementation of Standard for Long-Duration Contracts

On August 21, 2019, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) that would provide more time to apply the long-duration contracts standard by delaying the effective date for all insurance companies who issue such contracts, including life insurance and annuities.

The proposed ASU was issued one week after the FASB issued a separate proposed ASU to provide additional time for implementation of major accounting standards like current expected credit losses (CECL), leases and hedging, thereby introducing a new philosophy for determining effective dates for major standards, which involves staggering dates between public companies and other remaining entities.

The long-duration contracts standard refers to ASU No. 2018-12, Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, issued in August 2018, which was meant to improve the financial reporting requirements for long-duration contracts issued by insurance companies. After receiving a technical agenda request to defer the effective dates, citing various implementation challenges for insurance entities, the FASB made effort to communicate with insurance companies that issue long-duration contracts regarding any challenges or concerns associated with implementation1.

Per the new proposed ASU, implementation dates for Securities and Exchange Commission (SEC) public company filers other than smaller reporting companies would defer until fiscal years, and interim periods during those fiscal years, beginning after December 15, 2020 (2021 for calendar year-end entities). Smaller reporting companies and other public business entities, as well as private companies and non-profits, would defer until fiscal years, and interim periods during those fiscal years, beginning after December 15, 2022 (2023 for calendar year-end entities). Early application is permitted.

Comments on the proposed ASU may be submitted by September 20, 2019.

For more information on implementation of the long-duration contracts standard, reach out to us at info@dhg.com.

Public Business Entities (PBEs) All Others
SEC Filers Other Than Smaller Reporting Companies Smaller Reporting Companies and All Other PBEs
January 2021
January 2022
January 2021
January 2024
January 2022
January 2024

*Chart assumes calendar year-end reporting


  1. Proposed Accounting Standards Update, Financial Services – Insurance (Topic 944): Effective Date. Financial Accounting Standards Board, August 21, 2019.


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