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FASB Seeks Public Comment on Extending Deadline for Credit Losses, Leases Standards

August 16, 2019, 07:30 AM
Filed Under: Regulatory News

The Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) that would grant private companies, not-for-profit organizations and certain small public companies additional time to implement FASB standards on current expected credit losses (CECL), leases and hedging. Stakeholders are encouraged to review and provide comment on the proposed ASU by Sept. 16, 2019.

The proposed ASU describes a new FASB philosophy that extends and simplifies how effective dates for major standards are staggered between larger public companies and all other entities. Those other entities include private companies, smaller public companies, not-for-profit organizations and employee benefit plans. Under this philosophy, a major standard would first be effective for larger public companies.  For all other entities, the Board would consider requiring an effective date staggered at least two years later.  Generally, it is expected that early application would continue to be permitted for all entities.

“Based on what we’ve learned from our stakeholders, including the Private Company Council and the Small Business Advisory Committee, private companies, not-for-profit organizations, and some small public companies would benefit from additional time to apply major standards,” stated FASB Chairman Russell G. Golden. “This represents an important shift in the FASB’s philosophy around effective dates, one we believe will support better overall implementation of these standards.”

Based on that philosophy, the board proposes to amend the effective dates for CECL, leases and hedging. as follows (chart assumes calendar-year end):

  • Leases: Private & All Others January 2021; SEC Filers and All other Public Business Entities remain January 2019.
  • CECL: January 2023 for All Other Public Business Entities and for Private & All others; the effective date for SEC filers remains January 2020 (except SRCs, which is January 2023).
  • Hedging: January 2021 for Private & All others; the effective date for SEC Filers and All other Public Business Entities remains January 2019.

The proposed ASU and a FASB In Focus overview document are available at

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