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Client Alert: FASB Discloses Effective Dates for Leases and Financial Instrument Projects

On November 11, 2015, the Financial Accounting Standards Board (FASB) disclosed the highly anticipated effective dates for three major accounting standards expected to be issued in late 2015 and early 2016:

  • Leases
  • Impairment of financial instruments
  • Recognition and measurement of financial instruments

Key Provisions

Leases
FASB decided that for public companies, the upcoming standard will be effective for fiscal years (and interim periods within those fiscal years) beginning after December 15, 2018. For private companies, the standard will be effective for annual periods beginning after December 15, 2019.

Early adoption will be permitted for all companies and organizations upon issuance of the standard.

Impairment of financial instruments
Public businesses that meet the definition of an SEC filer will be required to apply the guidance for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Other public businesses will be required to apply the guidance for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

Non-public business organizations—including private companies, not-for-profit organizations, and employee benefit plans within the scope of FASB guidance on plan accounting—will be required to apply the guidance for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

Early application of the guidance will be permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

Recognition and measurement of financial instruments
The Accounting Standards Update (ASU) on recognition and measurement will take effect for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For nonpublic companies, the standard becomes effective for fiscal years beginning after December 15, 2018, and for interim periods within fiscal years beginning after December 15, 2019.
 

If you have any questions, please contact your engagement team or Daniel F. Morrill, CPA, Principal, at 413-726-6857 or dmorrill@wolfandco.com