Private companies can take a deep sigh of relief (for now) as FASB has proposed delaying the effective date for private companies to January 1, 2021. This delay would give companies an additional year to put into effect the new accounting rules and ease some of the stress of these changes. Public companies have already adopted the standard beginning January 1, 2019 and this additional time will assure they work out all of the kinks and give smaller nonpublic companies a better basis when they begin implementing the new standard in 2021. While FASB still has to issue a formal proposal before becoming official, the push back from those affected has seemed to get their attention.
Why they are moving the date?
The complexity and significance of this new standard has caused an outcry for the effective date to be pushed back, including a formal pitch from the AICPA. This has caused FASB to recognize the difficulties for smaller companies to implement such a major change in the standard (in this case multiple major changes) in a relatively short amount of time. Additionally, this realization has FASB reconsidering future implementation of significant standard changes going forward. For smaller standard changes, you can expect the same one year hold time between public and private company’s effective dates, however FASB is considering a two year wait being the new norm for larger codifications changes going forward.
For more information on the new lease standard click the following link: