New Accounting Standards Upcoming Effective Dates for Public and Private Companies

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In this publication, we’ve summarized the new accounting standards with mandatory^[1] effective dates in the first quarter of 2020 for public entities, as well as new standards that take effect in annual 2019 financial statements for nonpublic entities. Those effective dates reflect the FASB’s recent decision to defer certain major standards. We have also included links to BDO’s guidance on each pronouncement.
 
In the next filing season, calendar year-end public entities will prepare their annual 2019 financial statements, followed closely by their March 31, 2020 first quarter reports. The 2019 annual filings will disclose the anticipated effects that the FASB’s new standards will have on the financial statements when they are adopted under SAB 74.^[2] Most notably, the current expected credit losses^[3] (CECL) standard will be adopted by SEC filers, excluding smaller reporting companies, in the first quarter of 2020.^[4] Any standards issued after the date of this publication are unlikely to impact first quarter financial statements but should be considered in preparing SAB 74 disclosures.
 
On a similar timeline, calendar year-end nonpublic entities will prepare their annual 2019 financial statements reflecting standards that took effect in 2019. For many nonpublic entities, the new revenue standard^[5] will represent a significant change and may involve substantial effort.
 
Early adoption was generally permitted for all of the standards summarized herein, but each ASU has specific transition guidance and early adoption may have been limited to certain periods or circumstances. Please refer to BDO’s alerts for more information.

 

Accounting Standards Updates Effective for Calendar-year Public Entities as of January 1, 2020

Pronouncement	Effective Date	BDO Alert
ASC 326, Credit Losses
ASU 2016-13, Measurement of Credit Losses on Financial Instruments	For public business entities that are SEC filers, excluding SRCs, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2016-13 Alert
ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses	For public business entities that are SEC filers, excluding SRCs, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2018-19 Alert
ASU 2019-04, Codification Improvements to Topic 326	For entities that have not yet adopted ASU 2016-13, the effective dates and transition requirements for these amendments are the same as those in ASU 2016-13.   For entities that have adopted ASU 2016-13, the relevant amendments of ASU 2019-04 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2019-04 Alert
ASU 2019-05, Targeted Transition Relief	For entities that have not yet adopted the amendments in ASU 2016-13, the effective date and transition methodology for the amendments are the same as in Update 2016-13.   For entities that have adopted the amendments in ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2019-05 Alert
ASC 350, Intangibles – Goodwill and Other
ASU 2017-04, Simplifying the Test for Goodwill Impairment	For public business entities that are SEC filers, excluding SRCs, the amendments are effective for annual or any interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019.	ASU 2017-04 Alert
ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract	Effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2018-15 Alert
ASC 808, Collaborative Arrangements
ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606	Effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2018-18 Alert
ASC 810, Consolidation
ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities	Effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2018-17 Alert
ASC 815, Derivatives and Hedging
ASU 2019-04, Codification Improvements to Topic 815	For entities that have adopted the amendments in ASU 2017-12 as of the issuance date of this ASU, the effective date is as of the beginning of the first annual period beginning after the issuance date of this ASU.	ASU 2019-04 Alert
ASC 820, Fair Value Measurement
ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement	Effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2018-13 Alert
ASC 825, Financial Instruments
ASU 2019-04, Codification Improvements to Topic 825	The amendments in this ASU related to ASU 2016-01 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.	ASU 2019-04 Alert
ASC 842, Leases
ASU 2019-01, Codification Improvements to Topic 842	Effective for fiscal years beginning after December 15, 2019, including interim periods within those years.	ASU 2019-01 Alert
ASC 920, Entertainment—Broadcasters and ASC 926, Entertainment—Films
ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials	Effective for fiscal years beginning after December 15, 2019, including interim periods within those years.	Q1 2019 Guide
ASC 958, Not-for-Profit Entities
ASU 2019-03, Updating the Definition of Collections	Effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020.	Q1 2019 Guide

 

Accounting Standards Updates Effective for Calendar-year Nonpublic Entities as of January 1, 2019

 

Pronouncement	Effective Date	BDO Alert
ASC 220, Income Statement—Reporting Comprehensive Income
ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income	Effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.	ASU 2018-02 Alert
ASC 230, Statement of Cash Flows
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments	Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.	ASU 2016-15 Alert
ASU 2016-18, Restricted Cash	Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.	ASU 2016-18 Alert
ASC 405, Liabilities
ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products	Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.	ASU 2016-04 Alert
ASC 606, Revenue from Contracts with Customers
ASC 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets
ASU 2014-09, Revenue from Contracts with Customers ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ASU 2016-10, Identifying Performance Obligations and Licensing ASU 2016-12, Narrow-Scope Improvements and Practical Expedients ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets	Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.   For the individual ASUs and more information, refer to FASB’s Revenue Recognition Implementation Page.	BDO Knows: ASC 606   BDO Knows: ASC 606, Exploring Transition Methods   BDO Knows: ASC 606, Presentation and Disclosure
ASC 715, Compensation—Retirement Benefits
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost	Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.	ASU 2017-07 Alert
ASC 740, Income Taxes
ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory	Effective for fiscal years beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2019.	ASU 2016-16 Alert
ASC 805, Business Combinations
ASU 2017-01, Clarifying the Definition of a Business	Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.	ASU 2017-01 Alert
ASC 825, Financial Instruments
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.	ASU 2016-01 Alert
ASU 2018-03, Technical Corrections and Improvements to Topic 825, Recognition and Measurement of Financial Assets and Financial Liabilities	Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.	ASU 2018-03 Alert
ASC 853, Service Concession Arrangements
ASU 2017-10, Determining the Customer of the Operation Services	For an entity that has not adopted ASC 606 before the issuance of this ASU, the effective date and transition requirements for the amendments generally are the same as the effective date and transition requirements for ASC 606.   For a nonpublic entity that has adopted ASC 606 before the issuance of this ASU, the ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.	ASU 2017-10 Alert
ASC 958, Not-for-Profit Entities
ASU 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made	Contributions Received - Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.   Contributions Made - Effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.	ASU 2018-08 Alert
ASU 2019-06, Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities	Effective upon issuance of ASU 2019-06.	ASU 2019-06 Alert
ASC 960, Defined Benefit Pension Plans; ASC 962, Defined Contribution Pension Plans; and ASC 965, Health and Welfare Benefit Plans
ASU 2017-06, Employee Benefit Plan Master Trust Reporting	Effective for plan fiscal years beginning after December 15, 2018.	ASU 2017-06 Alert
ASC 995, U.S. Steamship Entities—Elimination of Topic 995
ASU 2017-15, Codification Improvements to Topic 995, U.S. Steamship Entities—Elimination of Topic 995	Effective for fiscal years beginning after December 15, 2018.	2017 Year in Review
Other
ASU 2018-09, Codification Improvements	Certain amendments become effective for fiscal years beginning after December 15, 2018.	2018 Year in Review

 

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CONTACT
 

Jennifer Kimmel National Assurance Director		Lisa Passalugo National Assurance Senior Manager
Thomas Faineteau National Assurance Partner		Gautam Goswami National Assurance Partner
Jin Koo National Assurance Partner		Jon Linville National Assurance Partner
Angela Newell National Assurance Partner		Adam Brown National Assurance Managing Partner-Accounting

 

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[1] Standards that become effective later but that can be early adopted currently are excluded.
[2] SEC SAB Topic 11.M
[3] ASC 326 Financial Instruments – Credit Losses
[4] The FASB affirmed in October 2019 its proposal to defer effective dates of certain major standards for certain entities, including CECL. An ASU is expected in the fourth quarter.  
[5] ASC 606 Revenue from Contracts with Customers