FASB proposes effective date deferrals for credit losses, derivatives and leases

The FASB has proposed amendments related to the effective dates for three major accounting standards. The proposed ASU would defers the effective date for the credit losses, derivatives and leases standards for certain companies.

Applicability

All companies

Relevant dates

• August 18, 2019 – FASB issued proposed ASU
• September 16, 2019 – Comments due on proposed ASU

Key impacts

Credit losses

• Deferral for SEC filers that are eligible to be ‘smaller reporting companies’, non-SEC filers and all other companies, including not-for-profit companies and employee benefit plans. 
• For calendar-year end companies that are eligible for the deferral, the effective date would be January 1, 2023.  
• 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. 

Derivatives

• One-year deferral for companies that are not public business entities. 
• For calendar-year end companies that are eligible for the deferral, the effective date would be January 1, 2021. 

Leases 

• One-year deferral for companies that are not public business entities.
• The deferral would exclude not-for-profit entities that have issued, or are conduit bond obligors for securities that are traded, listed or quoted on an exchange or an over-the-counter market, and employee benefit plans that file or furnish financial statements with or to the SEC.
• For calendar-year end companies that are eligible for the deferral, the effective date would be January 1, 2021. 

Related content

• KPMG's Handbook: Credit Impairment
• KPMG's Handbook: Leases
• KPMG's Handbook: Hedging
• FRV (pdf): Defining Issues, July 2019