Change Country

Tax & Assurance Guidance

FASB Delays Implementation for Revenue Recognition and Leases

Posted on May 21, 2020 by

Dave Van Damme

Dave Van Damme

Share This

The Financial Accounting Standards Board (FASB) voted on Wednesday, May 20 to delay the effective date of the Revenue Recognition Standard by one year for all nonpublic companies who have not issued financial statements yet. FASB had originally proposed a delay only for franchisors, but comment letters received related to the proposed amendment asked FASB to consider an extension to a broader population of companies, namely, all private companies who had not issued their financial statements yet.

The overarching theme of the comment letters was the reality that private companies have had to turn nearly all their attention to addressing their survival through months of decreased or nonexistent operations. In addition, the current remote work environment makes even routine, day-to-day financial accounting tasks extremely challenging. Many private companies need to work with their outside accountants to guide them through the implementation of new and complex standards. The “stay home stay safe” orders and categorization of essential and non-essential businesses has made it difficult to get the assistance needed to adopt the new accounting

In their meeting on Wednesday, the FASB showed their ability to consider the needs of non-public entities. Each member expressed empathy for the position that companies find themselves in, as communicated in many of the comment letters. A final ASU will be issued in the coming weeks that is expected to give nonpublic entities the option to adopt the revenue recognition standard (FASB ASC Topic 606, Revenue From Contracts With Customers) as of the date that is currently in place or to delay implementation for one year.

In this meeting the FASB also affirmed their decision to delay the effective date of the lease accounting standard for non-public companies and not-for-profit entities until fiscal years beginning after December 15, 2021 with early adoption permitted.

FASB Meeting Summary

The above represents our best understanding and interpretation of the material covered as of the date of this post. Things are moving at a rapid pace, and as such, information is subject to change. This information is provided for informational purposes only and is not intended to be a substitute for obtaining accounting, tax, or financial advice from an accountant.

Share This

Dave Van Damme

Shareholder, Advisory & Assurance

Leading the firm's advisory & assurance group, Dave supports closely held businesses with audits, financial reporting and fraud analysis.

Related Insights

Is Immediate R&D Expensing on The Horizon?

For the first time since 1953, taxpayers are not allowed an immediate deduction for R&E expenses and instead must capitalize and amortize such expenses. On March 17, 2023 a stand-alone bipartisan bill was reintroduced which would allow immediate expensing of R&D. Learn what this means for taxpayers.

by Sarah Russell

Section 174 Capitalization is Here

To the surprise (and dismay) of taxpayers and practitioners, Congress has been unable to repeal or defer the requirement to capitalize and amortize research and experimental (R&E) expenses under Internal Revenue Code Section 174.

by Sarah Russell

Meals and Entertainment Rules for 2022 Versus 2023

Understanding meals and entertainment expense deductions can be confusing. See the chart below for a summary of the meals and entertainment rules for 2022 versus 2023.

by Clayton & McKervey

The Sound of Automation Podcast

Industrial automation businesses are the driving force behind Industry 4.0, and Clayton & McKervey is here to help.

Skip to content