Reminder: New lease accounting standard (Topic 842) is effective for “Public” Not-for-Profits

The new lease accounting standard (Topic 842, “Leases”) is effective for fiscal years beginning after Dec. 15, 2019 (calendar year 2020), for Public Not-for-Profits (as defined below) that elected the optional one-year deferral thereof. Such entities should now be implementing Topic 842, and also taking into account any added complications related to COVID-19.

Background

The Financial Accounting Standards Board’s (FASB’s) Accounting Standards Update 2020-05 (ASU 2020-05, issued in June 2020) provided a limited deferral of the effective date of Topic 842 (which supersedes lease accounting under Topic 840) for certain reporting entities. That group included not-for-profit entities that have issued or are conduit bond obligors for securities that are traded, listed, or quoted on an exchange or over-the-counter market – or “Public NFPs” – that had not yet issued financial statements or made financial statements available for issuance as of June 3, 2020 (or have not yet issued 2019 financial statements). For Public NFPs that elected the limited deferral, Topic 842 is effective for fiscal years beginning after Dec. 15, 2019 (calendar year 2020). 

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