New Accounting Standards Upcoming Effective Dates for Public and Private Companies
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 | ||
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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. |
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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. |
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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. |
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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. |
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ASC 350, Intangibles – Goodwill and Other |
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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. |
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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. |
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ASC 808, Collaborative Arrangements |
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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. |
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ASC 810, Consolidation |
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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. |
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ASC 815, Derivatives and Hedging |
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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. |
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ASC 820, Fair Value Measurement |
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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. |
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ASC 825, Financial Instruments |
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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. |
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ASC 842, Leases |
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ASU 2019-01, Codification Improvements to Topic 842 |
Effective for fiscal years beginning after December 15, 2019, including interim periods within those years. |
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ASC 920, Entertainment—Broadcasters and ASC 926, Entertainment—Films |
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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. |
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ASC 958, Not-for-Profit Entities |
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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. |
Accounting Standards Updates Effective for Calendar-year Nonpublic Entities as of January 1, 2019
| Pronouncement | Effective Date | BDO Alert |
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ASC 220, Income Statement—Reporting Comprehensive Income |
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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. |
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ASC 230, Statement of Cash Flows |
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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. |
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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. |
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ASC 405, Liabilities |
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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. |
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ASC 606, Revenue from Contracts with Customers |
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ASC 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets |
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ASU 2014-09, Revenue from Contracts with Customers |
Effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. |
BDO Knows: ASC 606 |
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ASC 715, Compensation—Retirement Benefits |
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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. |
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ASC 740, Income Taxes |
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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. |
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ASC 805, Business Combinations |
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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. |
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ASC 825, Financial Instruments |
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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. |
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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. |
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ASC 853, Service Concession Arrangements |
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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. |
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ASC 958, Not-for-Profit Entities |
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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. |
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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. |
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ASC 960, Defined Benefit Pension Plans; ASC 962, Defined Contribution Pension Plans; and ASC 965, Health and Welfare Benefit Plans |
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ASU 2017-06, Employee Benefit Plan Master Trust Reporting |
Effective for plan fiscal years beginning after December 15, 2018. |
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ASC 995, U.S. Steamship Entities—Elimination of Topic 995 |
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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. |
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Other |
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ASU 2018-09, Codification Improvements |
Certain amendments become effective for fiscal years beginning after December 15, 2018. |
[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
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