Pennsylvania Tax Officials State that Teleworkers Will Not Create Nexus for State Taxes
Stay-at-home orders in effect across the country have forced a large portion of the American work force to work from home. Businesses transitioning their ...
On Wednesday, May 20, 2020, the FASB voted to delay the effective date of ASU 2016-012, Leases and ASU 2014-09, Revenues from Contracts with Customers for certain organizations with a formally drafted ASU expected in June. The concern was that certain organizations couldn’t deploy funds or human capital in the adoption of accounting standards while they contend with the business disruptions caused by COVID-19. The FASB recognizes those challenges and concerns and acted accordingly.
Previously in April, the FASB proposed to delay the leasing standard for private companies and not-for-profits that meet the FASB definition of a public business entity by one year in response to the impacts of COVID-19. FASB had also previously proposed a one year delay in the revenue recognition standard for private company franchisors. In a surprise move, the FASB voted to delay the revenue recognition standard by one year for all private companies that have not yet issued financial statements or made those financial statement available for issuance. This delay will provide tremendous relief to private companies with non-calendar year end reporting dates as they work through the business challenges of COVID-19. The delay will push the adoption date for revenue recognition for those private companies that have not yet issued, or made the financial statements available for issuance to fiscal years beginning after December 15, 2019. The FASB did not delay the effective date for ASU 2018-08 which clarifies the scope and accounting guidance for contributions received and contributions made. Not-for-profit entities will need to pay close attention to the effective dates listed in ASU 2018-08.
The FASB previously delayed the leasing standard by one year only for private companies and private not-for-profits in late 2019; however, not-for-profits qualifying as public business entities were not granted a similar reprieve as their private company counterparts at that time. In response to the COVID-19 economic hardships placed on all not-for-profits in executing their mission and managing their organization, FASB voted to delay the leasing standard for not-for-profits meeting the definition of a public business entity by one year if those organizations have not yet issued financial statement or made the financial statements available for issuance. The vote also delays leases for private companies and private not-for-profits. Private companies and private not-for-profits will now be required to adopt ASU 2016-02, Leases for fiscal years beginning after December 15, 2021 and public not-for-profits will adopt the standard for fiscal years beginning after December 15, 2019. We believe that this decision provides timely relief to higher education institutions that typically have to adopt accounting standards as the same time as public companies.
The FASB also highlighted discussions regarding the fluid and dynamic nature of the Payroll Protection Program (PPP) and affirmed is commitment in reviewing recommendations and reasonable applications of GAAP by the AICPA expert panels as it relates to accounting for the PPP.
This article was updated on May 1, 2020. Updates to this article will be made as new information becomes available. Schneider Downs continues to track ...
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