If there is any one thing we can thank the pandemic for, it is the delay in the Accounting Standard Codification Topic 842 (ASC 842). Public companies and some not-for-profits with public debt were required to incorporate this new lease standard back in 2019, while private companies and other not-for-profit entities will once again receive a reprieve.
Not-for-profits holding public debt that haven’t issued statements reflecting the adoption of ASC 842 can delay until fiscal years beginning after December 15, 2019. This pandemic-related delay means that for these not-for-profit entities, reporting would be required for most fiscal years starting in 2020. Many of these entities benefiting from the delay are hospitals and universities.
Private entities and not-for-profits without public debt will be required to start adoption in fiscal years starting after December 15, 2021. So take a breather, the reporting burden isn’t going to start until the fiscal year starting in 2022 for these entities. Do not wait too long though because the delay is not only because of the pandemic but also because of the time and effort in the adoption of ASC 842.
As you look towards adopting this standard, Schneider Downs can help with your lease accounting needs. We have staff available to train your personnel on the guidance and help develop organizational procedures in relation to leases, and we have software available to manage, track and create your lease accounting entries. Contact Jason Reljac at 412.697.5483 or [email protected] to find out more.
