- Whether private companies and nonprofits will get extra time to implement new lease accounting standards is on the agenda this week of the Financial Accounting Standards Board (FASB).
- Private companies and nonprofits are supposed to start using changes under Sec. 842 for annual reporting periods beginning after Dec. 15 of this year.
- The new standards require companies to treat longer-term operating leases the same way as they do capital leases (now known as finance leases), which means including them on their balance sheet as lease assets or liabilities rather than in the footnotes. Some additional flexibility is provided for the treatment of leases with durations of less than a year.
Public companies have been subject to the new standards for a year already, but FASB has been hearing feedback that more time is needed for private companies and nonprofits because of the resources required to make such sweeping changes.
“We’ve heard different perspectives,” FASB Chair Richard Jones told reporters at a press event on Tuesday. “We’ve been doing a lot of outreach with folks to understand where they are in the adoption process, and also [to see] what more time would mean.”
The board meets Wed., Nov. 10, at 1:30 ET.