By Joel C. Colbourn, CPA, MBA; Stephen G. Austin, CPA, MBA; and Jim LoPresti, MBA | Originally posted on www.journalofaccountancy.com
In early 2020, the COVID-19 pandemic added another element of business disruption for organizations to manage while the effective dates to comply for FASB’s new lease accounting standards were quickly approaching.
Following a pandemic-related delay, the new standard takes effect for entities within the “all other entities” category for fiscal years starting after Dec. 15, 2021, and for interim periods within fiscal years beginning after Dec. 15, 2022. The ramifications of the COVID-19 pandemic have affected organizations in ways we are yet to fully understand, and the impact on lease accounting processes continues to evolve in response to changes that have occurred in the business environment.
For public companies, FASB Accounting Standards Codification (ASC) Topic 842, Leases, took effect for fiscal years and interim periods within those fiscal years, beginning after Dec. 15, 2018. There is an exception for public not-for-profit entities, whose effective date is for fiscal years beginning after Dec. 15, 2019, including interim periods within those fiscal years.
Meanwhile, GASB delayed by one year the required implementation of GASB Statement No. 87, Leases, which is now applicable for fiscal years beginning after June 15, 2021.
COVID-19 arrived in early 2020 and spread rapidly and now has extended worldwide with the delta variant in 2021. By mid-March 2020, state and local governments began issuing restrictions shutting down many businesses other than health care and providers of “essential services.”… Read More