Are You Keeping Up-to-Date on the Latest COVID-19 Changes?
I hesitate to count, but I think we can all agree that the volume and pace of regulatory guidance that has been released during the past few months related to the coronavirus pandemic has been staggering, and the number and frequency of changes and differing interpretations of these directives is a challenge to keep up with. Our COVID-19 Resource Center is continuously updated for new topics that affect financial institutions, including updates and changes to existing guidance, and in-depth articles on nearly every new COVID-19 relief program affecting our clients including commentary from many of our practice leaders. We encourage you to visit our COVID-19 Resource Center on our website to keep abreast of the changing landscape. With that said, summarized below are the most recent updates and changes to accounting standards issued by the Financial Accounting Standards Board (FASB):
On June 3, the FASB issued Accounting Standards Update (ASU) 2020-05, which defers the effective dates of two much anticipated accounting standards: Topic 842 – Leases and Topic 606 – Revenue from Contracts With Customers, principally in response to concerns over the implementation delays caused by the COVID-19 pandemic. The FASB also proactively addressed technical matters related to accounting for lease concessions, and more specifically how to determine whether a change in lease terms should be accounted for as a new lease or a modification. The FASB addressed these issues under both the existing lease guidance (Topic 840) as well as under the new lease standard for those entities which have already adopted Topic 842. The new effective dates are as follows:
Topic 606 – Revenue from Contracts with Customers is now effective for fiscal years beginning after December 15, 2019 for non-public entities who have not yet issued financial statements reflecting the adoption, and interim periods in the subsequent year.
Topic 842 – Leases is now effective for non-public entities for fiscal years beginning after December 15, 2021 and interim periods in the subsequent year. Early adoption is still permitted.
In addition, Section 4014 of the CARES Act includes an optional but temporary deferral of the effective date of CECL, the eagerly anticipated new credit loss standard available to financial institutions that qualify as insured depository institutions (IDIs) to the earlier of the date on which the public health emergency has terminated, or December 31, 2020.
We are continuing to closely follow and monitor the COVID-19 situation as it impacts our financial institution clients so that we can provide you with relevant, easy to understand, critical information as the pandemic continues to evolve. For additional information please visit our COVID-19 Resource Center on our website, or contact your BNN banking advisor at 800.244.7444.
Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.