ARTICLE
On June 3, 2020, the FASB issued Accounting Standards Update (ASU) 2020-05, Revenue from Contracts with Customers (ASC 606) and Leases (ASC 842) Effective Dates for Certain Entities, as part of its efforts to support and assist stakeholders as they cope with the many challenges and hardships related to the COVID-19 pandemic. This ASU provides the deferral to the effective dates of the ASCs as follows: ASC 606 – Revenue Recognition from Contracts with Customers ASU 2020-05 defers the effective date of ASC 606 for certain entities that have not yet issued their financial statements (or made financial statements available for issuance) reflecting the adoption of FASB ASC 606. Those entities may elect to adopt ASC 606 for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020. Early application continues to be permitted. The effective date for a public business entity, a not-for-profit (NFP) entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market (public NFPs), and an employee benefit plan that files or furnishes financial statements with or to the Securities Exchange Commission is not affected by the amendments in this ASU. ASC 842 – Leases The effective date of ASC 842, Leases, is deferred as follows: For private companies and other (non-public) NFPs, to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. For public NFPs that have not yet issued (or made available for issuance) financial statements to fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The ASU clarifies that a public NFP is eligible for the deferral if it has posted only interim financial information in the Electronic Municipal Marketplace Access (EMMA) system. Conversely, a public NFP is ineligible for the deferral if it has posted interim or annual U.S. GAAP-compliant financial statements in EMMA because that would be an issuance of financial statements. While financial information is a broad term that can vary widely in content from an earnings release to a balance sheet and income statement, U.S. GAAP-compliant financial statements is a widely-understood term and includes a full set of disclosures. The FASB acknowledges that a public NFP entity that has posted financial information on EMMA still may have significant remaining costs to complete its adoption of FASB ASC 842 to produce a full set of financial statements with disclosures. Early application continues to be permitted. For more information, refer to ASU 2020-05 on the FASB website.
On June 3, 2020, the FASB issued Accounting Standards Update (ASU) 2020-05, Revenue from Contracts with Customers (ASC 606) and Leases (ASC 842) Effective Dates for Certain Entities, as part of its efforts to support and assist stakeholders as they cope with the many challenges and hardships related to the COVID-19 pandemic. This ASU provides the deferral to the effective dates of the ASCs as follows:
ASC 606 – Revenue Recognition from Contracts with Customers
ASU 2020-05 defers the effective date of ASC 606 for certain entities that have not yet issued their financial statements (or made financial statements available for issuance) reflecting the adoption of FASB ASC 606. Those entities may elect to adopt ASC 606 for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020. Early application continues to be permitted.
The effective date for a public business entity, a not-for-profit (NFP) entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market (public NFPs), and an employee benefit plan that files or furnishes financial statements with or to the Securities Exchange Commission is not affected by the amendments in this ASU.
ASC 842 – Leases
The effective date of ASC 842, Leases, is deferred as follows:
The ASU clarifies that a public NFP is eligible for the deferral if it has posted only interim financial information in the Electronic Municipal Marketplace Access (EMMA) system. Conversely, a public NFP is ineligible for the deferral if it has posted interim or annual U.S. GAAP-compliant financial statements in EMMA because that would be an issuance of financial statements. While financial information is a broad term that can vary widely in content from an earnings release to a balance sheet and income statement, U.S. GAAP-compliant financial statements is a widely-understood term and includes a full set of disclosures. The FASB acknowledges that a public NFP entity that has posted financial information on EMMA still may have significant remaining costs to complete its adoption of FASB ASC 842 to produce a full set of financial statements with disclosures.
Early application continues to be permitted.
For more information, refer to ASU 2020-05 on the FASB website.