Acknowledging the unprecedented impact of Covid-19 and the disruption it has caused for businesses and capital markets, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-05 to provide immediate, near-term relief. Officially, ASU No. 2020-05 extends implementation of the new revenue recognition and lease accounting standards by one year for certain entities. More specifically:
- Revenue Recognition. Under the amendments, Revenue from Contracts with Customers is effective for private companies and private not-for-profit entities for annual reporting periods beginning after December 15, 2019, or for interim reporting periods within annual reporting periods beginning after December 15, 2020, so long as these private companies and private not-for-profit entities have not yet issued financial statements (or made available for issuance) as of June 3, 2020, reflecting the adoption of Topic 606. Early application continues to be permitted.
- Leases. Under the amendments, Leases is effective for private companies and private not-for-profit entities for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Additionally, Leases is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, for public not-for-profit entities that have not yet issued financial statements (or made available for issuance) as of June 3, 2020, reflecting the adoption of Topic 842. Early application continues to be permitted.
Take advantage of the extension to prepare for the new implementation date by reaching out today to a CSH advisor—we will help you plan for compliance to the new standard.
