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FASB Delays Effective Dates for Four Major Accounting Standards

AAFCPAs is excited to inform you that the Financial Accounting Standards Board (FASB) voted to extend the effective dates of four key accounting standards at their latest July 17, 2019 meeting.

The proposed delay to the effective dates for certain companies affects accounting for leases, credit losses, hedging, and long-duration insurance contracts. This is FASB’s response to the burden placed on companies having to adopt various complex accounting standards in the short period of time.

FASB is planning to issue two exposure drafts proposing the new effective dates for accounting for leases, credit losses and hedging (in the first exposure draft) and long-duration insurance contracts (in the second exposure draft). There will be a 30-day comment period for each draft. The proposed extended effective dates are as follows:

  • Lease accounting: The new effective date for calendar-year-end preparers that are not public business entities would be Jan. 1, 2021 (or after for fiscal year end preparers). The effective date for calendar-year-end public business entities, employee benefit plans, and not-for-profit conduit bond obligors did not change (Jan. 1, 2019).
  • Accounting for credit losses: The new effective date for all non-SEC entities and smaller reporting companies as defined by the SEC, with calendar-year-end would be Jan. 1, 2023 (or after for fiscal year end preparers). The effective date for calendar-year-end SEC filers, excluding smaller reporting companies as defined by the SEC, would remain Jan. 1, 2020.
  • Derivatives and hedging: The new effective date for calendar-year-end preparers that are not public business entities would be Jan. 1, 2021, an extension of one year. The effective date for calendar-year-end public business entities is Jan. 1, 2019, and would remain unchanged.
  • Long-duration insurance contracts: The new effective dates would be Jan. 1, 2022, for calendar-year-end public business entities and Jan. 1, 2024, for all other entities with a calendar-year-end.

FASB is not planning to change any early adoption options. Those who have early adopted any of the four standards can use this time to improve the processes developed during the implementation.

AAFCPAs feels that the extension to the lease accounting standard is significant and positive news for our client base. This standard represents substantial work to locate and analyze the lease agreements to then extract the necessary data for performing the new accounting.

AAFCPAs would like to remind our clients that these changes to implementation dates do not affect those that follow GASB as their financial reporting framework (e.g. charter schools).

If you have any questions, please contact Olga Yasinnik, CPA, MBA at, 774.512.4082; Jeffrey Mead, CPA, CGMA at, 774.512.4143; or your AAFCPAs Partner.

About the Authors

Jeff Mead, Audit Partner
Jeffrey is a Partner and leader of AAFCPAs’ Commercial Practice, providing proactive audit/assurance, tax, and advisory solutions for closely-held and privately-owned businesses. His diverse commercial client base includes: professional service firms, technology companies, publishers, and manufacturers/distributors. Jeffrey strives to use the audit process as a fulcrum to leverage opportunities and to provide high-value, creative services to his clients. He has significant experience advising clients on economic and tax implications for key transactions, as well as new or complex applications of accounting pronouncements. He is a member of AAFCPAs’ Revenue Recognition and Lease Accounting Task Forces, providing technical accounting advice regarding understanding new standards, assessing the impact, and guidance on implementation and transition. He has extensive expertise advising employee benefit plan fiduciaries, including those offering 401(k), 403(b), defined benefit plans, and profit-sharing plans.
Olga Yasinnik
Olga specializes in driving high-energy audit teams, and advising sophisticated nonprofit organizations, including multi-services human & social services providers, community development corporations (CDCs) and their affordable housing development projects. She provides proactive guidance to these clients who receive state and federal grants, and must file Uniform Financial Reports (UFRs) and require audits in accordance with Uniform Guidance/Single Audit and Government Auditing Standards. Olga has extensive experienced in advising clients with projects funded by Low Income Housing and Historical Tax Credits.  She is an active leader of AAF’s Affordable Housing and Real Estate Community Development, and Human & Social Services practices.