ASU 2020-05 — Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842)—Effective Dates for Certain Entities

Coronavirus Disease 2019 (COVID-19) pandemic is adversely affecting the global economy and causing significant and widespread business and capital market disruptions. The Board is committed to supporting and assisting stakeholders during this difficult time.

The Board is issuing this Update as a limited deferral of the effective dates of the following Updates (including amendments issued after the issuance of the original Update) to provide immediate, near-term relief for certain entities for whom these Updates are either currently effective or imminently effective:

1. Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (Revenue)

2. Accounting Standards Update No. 2016-02, Leases (Topic 842) (Leases).

The amendments in this Update defer, for one year, the required effective date of Revenue for entities, that are not public business entities, that have not yet issued their financial statements (or made financial statements available for issuance) reflecting the adoption of Revenue. Those entities may elect to adopt the guidance for annual reporting periods beginning after December 15, 2019 and for interim reporting periods within annual reporting periods beginning after December 15, 2020. Those entities may elect to follow the original effective date of annual reporting periods beginning after December 15, 2018 and interim reporting periods within annual reporting periods beginning after December 15, 2019.

The amendments in this Update defer the effective date of Leases for private entities (the “all other” category) to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Additionally, the amendments defer the effective date of Leases to fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, for not-for-profit entities 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 that have not yet issued financial statements (or made financial statements available for issuance). Early application continues to be permitted which means that an entity may choose to implement Leases before those deferred effective dates.

This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2020-300—Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842)—Effective Dates for Certain Entities, which has been deleted.

Issued: June 3, 2020