FASB discusses and responds to coronavirus

On May 20, 2020 the FASB voted to affirm and expand its proposal to defer the effective dates of the leases and revenue standards for certain entities, and directed the staff to draft the final ASU. 

Additionally, the FASB:

• expanded the deferral of the revenue standard (ASC 606) to all private entities that have not already issued (or made available for issuance) financial statements thereunder; and
• discussed entities’ disclosures around government assistance received in response to COVID-19.

On April 21, 2020 the FASB issued a proposed ASU, formally proposing the effective date deferrals of the new revenue standard and the new leases standard for certain entities (outlined below). 

The FASB met on April 8, 2020 to discuss accounting issues arising from the COVID-19 outbreak. 

• The FASB tentatively decided to defer for one year the mandatory effective dates of:
  • ­ the new leases standard (ASC 842) for private companies and public not-for-profit entities; and
  • ­ ASC 606 for private company franchisors that have not already issued (made available for issuance) their financial statements under ASC 606.
• The FASB indicated it will continue to monitor the need for changes to mandatory effective dates of other new standards for which those dates are not in the near term, as well as the ‘sunset date’ of the reference rate reform standard.
• The FASB discussed technical inquiries the FASB staff has received related to the COVID-19 outbreak, including those related to lease rent concessions, interest income recognition on loans with payment holidays and cash flow hedging relationships discontinued as a result of the COVID-19 outbreak.