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On August 15, 2019, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) that would allow additional time to implement the Current Expected Credit Losses (CECL), or ASU 2016-13, standard.
Previously, the effective dates for CECL (for calendar year-end companies) were January 2020 for all SEC filers and January 2021 for all other entities. Under the proposed update, the effective date for calendar year-end SEC filers, excluding smaller reporting companies (SRCs), would remain January 2020. The new effective date for all other calendar year-end companies (including SRCs) would be January 2023. An entity may be considered an SRC if the entity is an SEC issuer and does not exceed established levels of public float, annual revenue, or both as defined by the SEC.
The proposal is subject to a 30-day comment period for feedback that closes on September 16, 2019. Delap will continue to monitor the potential changes. If you have any questions regarding the proposed ASU or the CECL implementation process, please reach out to our team today!