A palpable sigh of relief went through the accounting world last week.
As of July 17th, the Financial Accounting Standards Board (FASB) voted to extend the deadline for its ASC 842 compliance.
Private companies get another year on the clock.
This move by the governing board to transition the deadline to January 1, 2021 presents some serious questions. After all, public companies didn’t receive this generous offer. Their compliance deadline remained set in stone for the beginning of 2019.
So why did the FASB decide to initiate this roll back? It’s a tricky question fraught with complications and complexity, much like the new lease accounting standard itself.
On the surface, it makes sense why private companies are welcoming this update to the schedule. There’s a pile of challenges even the most fearless accountant wouldn’t want to tackle.
But dig deeper into the effects of the decision, and you might question if it was a good idea after all.