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PrimeGlobal member firm AAFCPAs discuss the possible postponement of ASU 2016-02 by the Financial Accounting Standards Board.
The Financial Accounting Standards Board (FASB) on April 8, 2020 issued a proposal to defer the effective date for ASU 2016-02, Leases, and all subsequent amendments by one year in response to the ongoing coronavirus pandemic.
For private companies and private nonprofits, the effective date would be for fiscal years beginning after December 15, 2021. For public nonprofits (those who are conduit bond obligors for public debt), the effective date would be for fiscal years beginning after December 15, 2019 provided the entity has not issued financial statements.
There is a 15-day comment period after which this proposal is expected to be adopted.
Lease Accounting Guidance for Lease Concessions
Also on April 10, 2020, FASB staff issued a question-and-answer document to address questions on the application of the lease accounting guidance for lease concessions related to the effects of the coronavirus pandemic. Many lessors are or may be asked to provide lease concessions due to the economic disruptions caused by the pandemic. This Q&A is intended to respond to some of the FAQs to help stakeholders navigate the guidance in this area. For lease concessions related to the effects of the pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in Topic 842, Leases (or Topic 840, Leases) to those contracts.
AAFCPAs is the largest PrimeGlobal member firm in Boston, Massachusetts with 220+ staff, and 33 partners.Learn more