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FASB delays credit loss rules

11.22.19

The leases effective date is delayed for private companies (and other entities, such as not-for-profits) for one year.


In November, the Federal Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-10, which delays the Current Expected Credit Losses (CECL) effective date for SEC smaller reporting companies by three years, other public business entities by two years, and private and not-for-profit organizations by one year.

The details:

  • The effective date of Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, changed from 2020 to 2023 for smaller reporting companies, from 2021 to 2023 for other public business entities, and from 2022 to 2023 for private companies and nonprofits. For these entities, the effective date is for fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods.
  • Larger calendar-year-end SEC registrants keep the current January 1, 2020, effective date to adopt ASU 2016-13.
  • The effective date of ASU No. 2016-02, Leases (Topic 842), and ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, has been deferred from 2020 to 2021 for private companies and nonprofits.

If you have any questions about this update or other CECL concerns, please contact the financial institutions team.

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