The Financial Accounting Standards Board today proposed to delay for certain filers the effective date of its new lease accounting guidance, which requires all operating leases to be recorded on the balance sheet of lessees. The effective date would be deferred by one year for non-public business entities. For these entities, the lease accounting standard would be effective for fiscal years beginning after Dec. 15, 2020, and interim periods within fiscal years beginning after Dec. 15, 2021.
FASB recognized that businesses have faced challenges in implementing the new standard, especially amid the coronavirus pandemic and with the effective date imminent for non-public business entities. The standard, which culminated a multiyear project when it was issued in 2016, changes how credit officers review the financial statements of their borrowers and affects the classification of assets and liabilities on bank balance sheets.