Question
Available on Monday, April 5, 2021 9:00 AM CDT Must post first. FASB recently changed its approach for the effective dates for ASU's. Prior to
Available on Monday, April 5, 2021 9:00 AM CDT
Must post first.
FASB recently changed its approach for the effective dates for ASU's. Prior to 2019, the effective date of the implementation of a new ASU for public entities was typically one year prior to the effective date for all other entities. (i.e. a public company may have an effective date of fiscal years beginning after 12/15/18 and all other entities effective for fiscal years beginning after 12/15/19).
In 2019, FASB changed the policy for the majority of effective dates to be as follows:
- Public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 20X1,
- For all other entities, for fiscal years beginning after December 15, 20X3.
FASB changed their view on effective dates by extending the time for smaller reporting and private entities to implement ASU's 2 years after the public entities have implemented the new guidance (used to be a one year lag).
Why do you believe that FASB extended the time for private entities and smaller reporting entities to implement new ASU's?
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