Breaking news this week – on Monday, May 13, 2019, the American Institute of Certified Public Accountants Private Companies Practice Section’s Technical Issues Committee (TIC) has sent a letter requesting the Financial Accounting Standards Board to delay the implementation of a new lease accounting standard for private companies.
The standard was made effective for public companies at the beginning of 2019, with an effective date for private companies slated for the start of 2020. TIC’s letter asks for a delay of one year for private company implementation.
According to a May 13, 2019 Journal of Accountancy article:
“TIC’s letter states that:
- It can take more than a year for private companies to learn from SEC comment letters about the implementation issues public companies faced.
- The magnitude of change related to the standard could be significant for lease-intensive companies, with potential changes to internal controls and systems for capturing contracts.
- Users of private company financial statements would not be adversely affected by a delay.
- It’s difficult for private companies to keep up with the narrow-scope improvements FASB continues to issue related to the standard.
- TIC has found errors in some of the software that third-party vendors offer for lease accounting standard implementation. TIC said it will take time to make sure the software performs correctly and provides accurate and auditable information.”
Various media outlets have reported on TIC’s letter, including the Wall Street Journal and Bloomberg, who interviewed Kristy Illuzzi, TIC Senior Technical Manager.
Thank you to PKF Texas Director, Danielle Supkis Cheek, CPA, CFE, CVA, for participating in TIC and speaking on behalf of our clients. We are also concerned about the impact of major accounting changes for our middle market clients. We are keeping tabs and will keep you updated as more information becomes available.
For the full article on Journal of Accountancy, visit www.journalofaccountancy.com.