FASB proposes effective date deferral for long-duration contracts

The FASB has proposed amendments related to the effective date for long-duration contracts: targeted improvements. The proposed ASU would defer the effective date for all entities.

Applicability

All companies within the scope of ASU 2018-12 on long-duration contracts

Relevant dates

• August 21, 2019 – FASB issued proposed ASU
• September 20, 2019 – Comments due on proposed ASU

Key impacts

For calendar-year-end reporting companies within the scope of the ASU on long-duration contracts:

• For SEC filers, excluding ‘smaller reporting companies’, the effective date would be January 1, 2022.
• For SEC filers that are eligible to be ‘smaller reporting companies’, non-SEC filers and all other entities within the scope, the effective date would be January 1, 2024.
• A company’s determination about whether it is eligible to be a ‘smaller reporting company’ would be based on its most recent filing determination in accordance with SEC regulations as of the date the proposed ASU becomes final. 

Related content

• KPMG's Handbook: Long-duration contracts: Targeted improvements
• FRV (pdf): Defining Issues, July 2019