On Wednesday, June 10, the Financial Accounting Standards Board (FASB) met virtually to delay one significant new accounting standard and approve two others as Russell Golden completed his seven-year term as outgoing Chairman.
The Board approved an additional one-year delay of ASU 2018-12, Financial Services – Insurance (Topic 944): Targeted improvements to the Accounting for Long-Durations Contracts. The objectives are to improve the existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance entity. Long-duration contracts typically include life, disability, and long-term care policies, as well as annuities. The update applies to all insurance entities that issue long-duration contracts as defined in Topic 944, but not to policyholders of the contracts or noninsurance entities. The revised deferred effective date for non-SEC filers applies to fiscal years beginning after December 15, 2023.
Members also approved a proposed update (Project 2019-730) of ASC 470-20 and ASC 815-40 to simplify the current complexity of accounting guidance for convertible instruments and contracts in an entity’s own equity. The update is generally effective for non-SEC filers with fiscal years beginning after December 15, 2023.
Finally, the Board approved ASU 2018-08 related to nonprofits’ disclosure and presentation of gifts-in-kind to improve presentation and disclosure of contributed nonfinancial assets. This update is generally effective for annual reporting periods beginning after June 15, 2021.