On Wednesday, October 17, 2019, the Financial Standards Accounting Board (FASB) voted to approve the deferral of several recently-issued standards, including the application of Accounting Standards Update (ASU) 2016-02, Leases. The ASU will now be effective for years beginning after December 15, 2020, or calendar 2021, for nonpublic companies.
This is the beginning of a major shift by the FASB to provide for at least a 2-year window between implementation dates for public versus nonpublic companies for all new standards issued. The consensus is that more time is needed to poll public companies regarding any issues encountered during implementation so that nonpublic companies can learn from them, in an effort to reduce implementation cost and complexity.
A formal ASU confirming this decision is expected in mid-November.
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