The Financial Accounting Standards Board (FASB) agreed recently to propose a one additional year deferral for ASC 842 Leases, for private companies and not-for-profit organizations (including conduit debt obligors). The current implementation date for this standard was planned for 2021. If the proposal is approved after the 15 day comment period, the new standard will take effect in 2022 so entities can appropriately focus resources during the COVID-19 pandemic.
The FASB also voted to move forward with plans to defer the effective date of ASC 606 Revenue from Contracts with Customers, for one additional year, until 2020 for private company franchisors. The deferral is intended to allow additional time to explore practical expedients for the complexity of initial franchise fees and the allocation of up-front revenue.
If approved, these delayed effective dates would apply to the relevant entities which have not already issued financials statements.
The team at Martini Akpovi Partners will keep you up to date on developments with ASC 842 and ASC 606. In the meantime, if you have any questions, please contact us at (818) 789 1179.