FASB Officially Defers New Lease Accounting Standard Effective Date

October 21, 2019FASB Lease Defers New Lease Accounting Standard Effective Date

As widely expected, the Financial Accounting Standards Board (FASB) unanimously voted on October 16, 2019 to defer the effective date of its major new Accounting Standards Update (ASU 2016-02) related to accounting for leases. (This is the ASU that generally requires organizations to capitalize leases, including operating leases, with terms of more than one year.) The FASB deferred the ASU by one year for most nonprofit organizations. For organizations to which the deferral applies, the new effective date of the lease standard is for fiscal years beginning after December 15, 2020 (calendar years ending December 31, 2021 and non-calendar years beginning in 2021).

The deferral does not apply to a nonprofit organization that is a borrower of tax-exempt bonds and is considered a conduit bond obligor for securities that are traded, listed, or quoted on an exchange or over-the-counter market. The deferral does apply to conduit bond obligors of securities sold pursuant to a private placement offering.

BMWL Clients: If your organization is a borrower of tax-exempt bonds and you are not sure whether the deferral applies, please contact us for assistance in determining the effective date for your organization.

 

 

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