Posted by Christina K. Bell, CPA
On May 20, 2020, FASB voted to extend by one year the effective date of its revenue recognition standard (FASB ASC Topic 606, Revenue From Contracts With Customers) to all nonpublic entities that have not yet issued their financial statements. “They [private companies] may not have the technology or resources to effectively implement the standard,” FASB member Sue Cosper said during the board’s meeting.
Nonpublic entities who have not already implemented Topic 606 will have the option of adopting on the current implementation date [annual reporting periods beginning after December 15, 2018 and interim periods within annual reporting periods beginning after December 15, 2019] or deferring implementation for one year.
FASB also reaffirmed its decision to amend the effective date of its lease accounting standard for private companies and nonprofits. For private companies and private nonprofits, the effective date will be for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022.
The new standard is expected to be issued by FASB in June.