The new effective date for SEC insurance filers adhering to US GAAP is now coincidentally aligned with the IFRS 17 effective date. Practitioners may be surprised to learn that transactions once considered 'exchange-type' may in fact have been contributions all along. Effective date and transition At its June 10 meeting, the FASB voted to propose a one-year deferral of the effective date of ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts in response to implementation challenges resulting 2018-12 is effective for fiscal years beginning after Dec. 15, 2023. While a deferral would have retained the alignment between the effective dates of Topic 606 and ASU 2018-08, the board decided the guidance in the ASU would be helpful to entities as they account for assistance received due to the COVID-19 global pandemic. 2018-08 will be helpful to nonpublic entities as they account for assistance they receive related to the pandemic. ... Schneider Downs continues to track the evolving landscape of federal financial programs offered in the wake of the business disruption caused by the coronavirus ... On Wednesday, May 20, 2020, the FASB voted to delay the effective date of ASU 2016-012, Leases and ASU 2014-09, Revenues from Contracts with Customers for certain organizations with a formally drafted ASU expected in June. The AICPA Technical Issues Committee (TIC), for example, suggested in a comment letter that any private company should be able to defer implementation of the revenue recognition standard for one year. For all other entities, the effective date for ASU 2018-03 is the same as the effective date in ASU 2016-01. The deferral moves the effective date for SEC filers from January 2021 to January 2022. ASU No. The effective dates for resource recipients were established so that the effective date of the ASU would align with the effective date of ASC Topic 606. The new guidance clarifies what is an exchange transaction, of which revenues would be reported under Topic 606, and what is a contribution reported under Topic 958. securities that are traded, listed or quoted on an exchange or market, the ASU is effective for fiscal periods beginning after December 15, 2018, including interim periods. Some effective date and transition requirements have been paraphrased in this document. The vote also delays leases for private companies and private not-for-profits. Final ASU 2018-08 Issued on Guidance for Contributions. © 2020 Schneider Downs. For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page. The amended effective date will be “for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020.” The board decided to make the amendment optional. For contributions, an organization should follow the guidance in Subtopic 958-605. Accounting Standards Update No. The effective dates for resource recipients were established so that the effective date of the ASU would align with the effective date of ASC Topic 606.     Applicability ASU 2018-19 Q&A.     Effective Date For most entities that are resource recipients, the effective date for applying the amendments of ASU 2018-08 will be for annual periods beginning after December 15, 2018. The effective dates for resource providers was delayed by one year. p:614.621.4060 All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission. For all other entities, the effective date is the same as the effective date in ASU 2016-01. The effective dates for resource providers was delayed by one year. The FASB confirmed … Early adoption of the amendments is permitted. 2019-10, Financial Instruments—Credit Losses (Topic 326), … The FASB did not delay the effective date for ASU 2018-08 which clarifies the scope and accounting guidance for contributions received and contributions made. Keeping you informed and prepared amid the COVID-19 crisis. Not-for-profit entities will need to pay close attention to the effective dates listed in ASU 2018-08. after a specified date. Under current practice, many nonprofits treat governmental entity grants and contracts as exchange transactions, regardless of the substance of the grant or contract. As a result, independent institutions will be required to apply the guidance for annual and interim periods beginning in FY23. All entities may early adopt these amendments for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, as long as they have adopted ASU 2016-01. Schneider Downs is the 13th largest accounting firm in the Mid-Atlantic region and serves individuals and companies in Pennsylvania (PA), Ohio (OH), West Virginia (WV), New York (NY), Maryland (MD), and additional states in the United States with offices in Pittsburgh, PA and Columbus, OH. 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. We’re gathering the latest news stories along with relevant columns, tips, podcasts, and videos on this page, along with curated items from our archives to help with uncertainty and disruption. This schedule is not a substitute for reading the Accounting Standards Updates. 2017-02 is By Lee Klumpp, CPA, CGMA The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made in June 2018 to clarify the accounting guidance related to contributions made or received. 2018-08 would have aligned that guidance with the revenue recognition deferral. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). All rights reserved. For entities other than public business entities, ASU 2017-02 is effective for fiscal years beginning after Dec. 15, 2020. For private nonprofit organizations that are resource providers, the effective dates will remain for annual periods that begin after December 15, 2019. For public business entities and not-for-profits that have issued or are a conduit bond obligor for securities that are traded, listed or quoted on an exchange or market, the ASU is effective for fiscal periods beginning after December 15, 2018, including interim periods. On October 26, 2020, the Internal Revenue Service announced the cost-of-living adjustments (COLA) that will take effect January 1, 2021 (IRS Notice 2020-79). McLean, VA 22102, contactsd@schneiderdowns.com On June 21, 2018, FASB issued ASU 2018-08, Topic 958, Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made. The effective dates for resource providers was delayed by one year. FALL 2018 www.bdo.com FINAL ASU 2018-08 ISSUED ON GUIDANCE FOR CONTRIBUTIONS By Lee Klumpp, CPA, CGMA The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-08, Not-for-Profit Entities (Topic 958): Early Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. The FASB has issued ASU 2018-08, Topic 958, Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made. p:412.261.3644 For non-public and other resource providers, ASU 2018-08 is effective for annual periods beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020. The ASU allows for different effective dates for contributions received versus contributions made. This quick guide walks you through the process of adding the Journal of Accountancy as a favorite news source in the News app from Apple. Select to receive all alerts or just ones for the topic(s) that interest you most. By using the site, you consent to the placement of these cookies. For more information, see ASU 2018-19 on FASB’s website. The final ASU is expected to give nonpublic entities the option of adopting the revenue recognition standard (FASB ASC Topic 606, Revenue From Contracts With Customers) on the current implementation date or deferring implementation for one year. The effective dates for each of the standards are now as follows: CECL (ASU No. — Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director. Meanwhile, FASB considered but rejected feedback asking for a delay in the effective date for ASU No. ASU 2018-08 clarifies existing guidance covered in Subtopic 958-605 and provides examples of how to discern between an exchange transaction, which is considered reciprocal, and a contribution, which is nonreciprocal. The concern was that certain organizations couldn’t deploy funds or human capital in the adoption of accounting standards while they contend with the business disruptions caused by COVID-19. The revenue recognition standard was effective January 1, 2019, for calendar-year-end public companies. CONTINUED FROM PAGE 1 FINAL ASU 2018-08 2 NONPROFIT STANDARD – FALL 2018. ASU 2018-08 … Therefore, the original effective date was retained. The delay will push the adoption date for revenue recognition for those private companies that have not yet issued, or made the financial statements available for issuance to fiscal years beginning after December 15, 2019. • For non-public entities, the effective date will be delayed by one year. In a surprise move, the FASB voted to delay the revenue recognition standard by one year for all private companies that have not yet issued financial statements or made those financial statement available for issuance. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. On June 3, 2020, the FASB issued ASU 2020-05,1 which amends the effective dates of the Board’s standards on revenue (ASC 6062) and leasing (ASC 8423) to give immediate relief to certain entities as a result of the widespread adverse economic effects and business disruptions caused by the coronavirus disease 2019 (COVID-19) pandemic. Some respondents also requested a delay for Accounting Standards Update (ASU) 2018-08, Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. The effective dates for resource providers was delayed by one year. ASU 2018-08 Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made (ASU 958, Not-for-Profit Entities) Effective date ... as of the effective date (only applies to the unrecognized portion) and to agreements that are entered into after the effective date. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. © 2020 Schneider Downs & Co., Inc. Maryland license number 35239, Paycheck Protection Program Second Draw Loans, Round Two of Economic Injury Disaster Loan Advances, Revisions to the Paycheck Protection Program, Coronavirus Relief Bill Includes Retirement Plan Relief, Next Round of Coronavirus Economic Stimulus on the Way, Still No Change in the Nondeducibility of PPP-funded Costs. For non-public entities, the effective date will be delayed by one year. For all other entities, ASU No. Effective Date The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Included in these proposed changes is Accounting Standards Update (ASU) No. ASU No. The views expressed in this presentation are those of the presenters. The board originally had proposed amending the revenue recognition standard effective date just for franchisors that are not public business entities. These changes come as a direct result of the effects of COVID-19 on organizations. The FASB previously delayed the leasing standard by one year only for private companies and private not-for-profits in late 2019; however, not-for-profits qualifying as public business entities were not granted a similar reprieve as their private company counterparts at that time. 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. Previously in April, the FASB proposed to delay the leasing standard for private companies and not-for-profits that meet the FASB definition of a public business entity by one year in response to the impacts of COVID-19. This delay will provide tremendous relief to private companies with non-calendar year end reporting dates as they work through the business challenges of COVID-19. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , defers the effective date of Update 2014-09 by one year. The amendment addresses the effective date for nonpublic business entities and whether operating lease receivables are in scope. Private companies and private not-for-profits will now be required to adopt ASU 2016-02, Leases for fiscal years beginning after December 15, 2021 and public not-for-profits will adopt the standard for fiscal years beginning after December 15, 2019. For public business entities (PBEs), the amendments in ASU 2018-07 are effective for fiscal years beginning after December 15, 2018, including interim periods therein. The Board retained the effective date of Accounting Standards Update No. The credit loss effective date would be delayed two years to fiscal years beginning after Dec. 15, 2022. For all other entities ASU No. The following effective dates are in place for ASU 2018-08: For entities that are public business entities (PBEs) and not-for-profits that have issued, or are conduit bond obligors for, securities that are traded, listed or quoted on an exchange or an over-the-counter market (public NFPs), that are: Standard name Effective date Early adoptable PwC resources ASU 2018-12 Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts SEC filers, excluding SRCs: As amended by ASU 2020-11, fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022 Other public business entities, including smaller reporting companies, would see the effective date move from January 2021 to January 2024. The ASU addresses practice issues by helping an entity evaluate whether it should account for a grant or similar contract as a contribution or as an exchange transaction. f:412.261.4876, 65 East State Street, Suite 2000 ASU 2018-08 Meanwhile, FASB considered but rejected feedback asking for a delay in the effective date for ASU No. For either a public business entity or a not A delay of ASU No. A delay of ASU No. FASB also clarified that public not-for-profit entities that have not yet issued their GAAP-compliant financial statements or made those financial statements available for issuance are among the entities included in the scope of the deferral of the board’s lease accounting effective date. 2014-09, Revenue from Contracts with Customers, for all entities for one year.Entities will, however, be allowed to apply the new standard as of the original effective dates set out in the standard. KPMG reports on the FASB’s ASU that clarifies how not-for-profits and others account for grants and similar transactions. Please note that individual situations can vary. In an attempt to align the adoption date of ASU 2018-08 for contributions received closely with the adoption of ASU 2014-09 (revenue recognition), the effective dates are accelerated for organizations receiving contributions. Schneider Downs is a Top 60 independent Certified Public Accounting (CPA) firm providing accounting, tax, audit and business advisory services to public and private companies, not-for-profit organizations and global companies. A decision tree flowchart is included in ASU 2018-08 and can be found at the end of this article. ASU No. This schedule is not a substitute for reading the Accounting Standards Updates. Private companies and all others: The hedge accounting and lease accounting effective dates would be delayed one year to fiscal years beginning after Dec. 15, 2020. Applicability. October 29, 2018 | BerganKDV Team. All rights-reserved. Columbus, OH 43215, contactsd@schneiderdowns.com The delays were first approved unanimously by FASB at a virtual board meeting in April. The new ASU further specifies whether a transfer of assets – or the reduction, settlement, or cancellation of liabilities – is a contribution or an exchange transaction. 2016-02, Leases. 2017-12 was already effective for fiscal years beginning after Dec. 15, 2018.