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 effective dates in the first quarter of 2021 for public entities, as well as new standards that take effect in annual 2020 financial statements for nonpublic entities. Those effective dates reflect the deferral of certain major standards provided in ASU 2019-10 and ASU 2020-05.

In the next filing season, calendar year-end public entities will prepare their annual 2020 financial statements, followed closely by their March 31, 2021 first quarter reports. The 2020 annual filings will disclose under SAB 74 the anticipated effects that the FASB’s new standards will have on the financial statements when they are adopted. 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 2020 financial statements reflecting standards that took effect in 2020. For nonpublic entities that elected to defer the new revenue standard, ASC 606, Revenue from Contracts with Customers, as permitted by ASU 2020-05, its initial application will represent a significant change and may involve substantial effort. The FASB has deferred the effective date of the new leases, ASC 842, Leases, standard until 2022 and the credit losses standard, ASU 2016-13, Measurement of Credit Losses on Financial Instruments and related amendments, until 2023 for nonpublic entities.

Early adoption is 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.

Accounting Standards Updates Effective for Calendar-year Public Entities as of January 1, 2021

Pronouncement Effective Date
ASC 310-20, Receivables—Nonrefundable Fees and Other Costs
ASU 2020-08Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs Effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
ASC 321, Investments—Equity Securities
ASU 2020-01Clarifying the Interactions between Topic 321, Topic 323, Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging Effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
ASC 715-20, Compensation—Retirement Benefits—Defined Benefit Plans
ASU 2018-14Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans Effective for fiscal years ending after December 15, 2020.
ASC 740, Income Taxes
ASU 2019-12Simplifying the Accounting for Income Taxes Effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
ASC 848, Reference Rate Reform
ASU 2020-04Facilitation of the Effects of Reference Rate Reform on Financial Reporting Effective as of March 12, 2020 through December 31, 2022.
Other
ASU 2020-10Codification Improvements Effective for annual periods beginning after December 15, 2020.

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

Pronouncement Effective Date
ASC 310-20, Receivables—Nonrefundable Fees and Other Costs
ASU 2017-08Premium Amortization on Purchased Callable Debt Securities Effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.
ASC 606, Revenue from Contracts with Customers
ASC 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets
ASU 2014-09Revenue from Contracts with Customers
ASU 2015-14, Deferral of the Effective Date
ASU 2016-08Principal versus Agent Considerations (Reporting Revenue Gross versus Net)
ASU 2016-10Identifying Performance Obligations and Licensing
ASU 2016-12Narrow-Scope Improvements and Practical Expedients
ASU 2016-20Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers
ASU 2017-05Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets
ASU 2020-05Effective Dates for Certain Entities
For entities that have not yet issued financial statements or made financial statements available for issuance as of June 3, 2020, those entities may elect to adopt the revenue guidance for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Those entities may elect to follow the original effective date of annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019.

For all other nonpublic entities, the guidance is already effective.

ASC 718, Compensation—Stock Compensation
ASU 2018-07Improvements to Nonemployee Share-Based Payment Accounting Effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.
ASU 2019-08Codification Improvements—Share-Based Consideration Payable to a Customer For entities that have adopted the amendments in ASU 2018-07, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

For entities that have not yet adopted the amendments in ASU 2018-07, the amendments are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020.

ASC 815, Derivatives and Hedging
ASU 2017-11Accounting for Certain Financial Instruments with Down Round Features Effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020.
ASU 2018-16Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes For entities other than public business entities that already have adopted the amendments in ASU 2017-12, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.

 

The amendments in ASU 2017-12 and ASU 2018-16 are mandatorily effective for fiscal years beginning after December 15, 2020, as deferred by ASU 2019-10.

ASC 820, Fair Value Measurement
ASU 2018-13Disclosure 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.
ASC 848, Reference Rate Reform
ASU 2020-04Facilitation of the Effects of Reference Rate Reform on Financial Reporting Effective as of March 12, 2020 through December 31, 2022.
ASC 853, Service Concession Arrangements
ASU 2017-10Determining the Customer of the Operation Services For entities that have not yet 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.
ASC 958, Not-for-Profit Entities
ASU 2018-08Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made For contributions Made – effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.
ASU 2019-03Updating 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.
 

Other

ASU 2018-09Codification Improvements Certain amendments are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020.
ASU 2020-03Codification Improvements to Financial Instruments The amendments related to Issues 1 through 5 are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020.

The amendments related to Issues 6 and 7:

For entities that have not yet adopted the guidance in Update 2016-13, the effective dates and the transition requirements are the same as the effective date and transition requirements in Update 2016-13.

For entities that have adopted the guidance in Update 2016-13, effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

Related Services: Valuation Services; Risk Advisory Services; Outsourced Accounting Services; Technical Accounting And Position Papers; Mergers And Acquisitions. 

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