Lease Accounting Changes

Edmund Fosu-Laryea, CPA

Following concern over the new lease accounting changes, the Financial Accounting Standards Board (FASB) has made the decision to delay the effective dates for three major standards. The new Accounting Standards Update (ASU) will give private companies and certain other entities an adoption extension on the new standards for leases, credit losses (CECL), and hedging.

This delay will allow preparers more time to understand and implement the changes and give these groups the opportunity to watch and learn how well-resourced public companies respond to the changes. Here is what you need to know.

New Effective Dates

 Fiscal years beginning after December 15, 2018Fiscal years beginning after December 15, 2019Fiscal years beginning after December 15, 2020Fiscal years beginning after December 15, 2022
SEC filers + *Smaller reporting companiesHedge Accounting + Lease Accounting Credit Loss  *Credit Loss
All other public business entities + **Employee benefit plans and certain nonprofitsHedge Accounting Lease Accounting**    Credit Loss
Private companies and all others    Hedge Accounting + Lease AccountingCredit Loss

**Employee benefit plans that file or furnish financial statements + nonprofits entities that have issued or are conduit bond obligors for securities that are traded, listed, or quoted on an exchange or over-the-counter market.

The new lease accounting standard will take effect for the majority of nonprofit organizations

for fiscal years beginning after December 15, 2019, and in interim periods within fiscal

years beginning after December 15, 2020. Early adoption is permitted for all organizations.

If you have a question about how the lease accounting changes and delays will affect your nonprofit, please give one of the professionals in our office a call today.