FASB votes to delay revenue recognition effective date for private companies
JofA article by Ken Tysiac
The Financial Accounting Standards Board has voted to delay the effective date of its revenue recognition standard for nonpublic entities that have not yet issued financial statements. Challenges related to the coronavirus pandemic have led to the delay.
FASB voted Wednesday to extend by one year the effective date of its revenue recognition standard to all nonpublic entities that have not yet issued their financial statements.
The board originally had proposed amending the revenue recognition standard effective date just for franchisors that are not public business entities. But feedback FASB received on the proposal related to coronavirus pandemic challenges convinced the board that a broader extension was needed.
The AICPA Technical Issues Committee (TIC), for example, suggested in a comment letter that any private company should be able to defer implementation of the revenue recognition standard for one year. TIC explained that private companies have had to turn nearly all their attention to addressing their own survival through months of decreased or nonexistent operations and that the current remote work environment makes even routine, day-to-day financial accounting tasks extremely challenging.
Full Story: Journal of Accountancy online (5/20)