On October 16th 2019, the Financial Accounting Standards Board officially announced that the effective dates for the leases, credit losses, hedging and long-duration insurance contract standards have been delayed. The delays are in response to complaints about the difficulty of implementing the new standards.
The lease, hedging and long-duration insurance contract standards have been delayed one year and are now effective for fiscal year beginning after December 15, 2020 for non-public companies. For many private companies, that means the effective date will be January 1, 2021. The effective date for public companies and not-for-profit entities that have issued or are conduit debt obligors remains unchanged and is effective for fiscal years beginning after December 15, 2018.
The credit losses standard has been delayed until fiscal years beginning after December 15, 2022 for public business entities that are not SEC filers and for private companies.
If you have any questions or concerns, please contact your Williams Keepers advisor. We have been, and will continue to be, working with you to assist with implementing these standards. Despite the additional time these extensions will provide, we continue to recommend companies begin preparing to implement these standard now, as it may take significant time and resources to determine the impact on financial ratios and covenant compliance.