FASB proposes delay in long-term insurance standard effective date

by | Dec 28, 2019 | Uncategorized | 0 comments

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FASB proposes delay in long-term insurance standard effective date

FASB recently proposed a delay in the effective date of its new accounting standard for longduration insurance contracts.

The proposed delay is consistent with a philosophy described in a proposal the board issued previously that would delay for certain entities the effective dates of the board’s standards on accounting for leases, credit losses, and hedging.

In the earlier proposal, FASB articulated a new philosophy for determining how effective dates for major standards would be staggered between larger public companies and all other entities. Under this philosophy, a major standard would take effect first for large public companies, with effective dates at least two years later for all other public and private companies and organizations. Early application would generally be expected to continue to be permitted for all preparers.

After receiving an agenda request to delay the insurance standard’s effective date by one year, FASB members and staff reached out to numerous insurance companies to understand their implementation challenges. Under the proposal, the effective dates for calendaryear reporting entities for the new insurance standard would be:

“We believe it will result in a higherquality implementation for all,” FASB Chairman Russell Golden said of the proposed new effective dates.

Comments on the proposal were due by Sept. 20 at FASB’s website.

Research & References of FASB proposes delay in long-term insurance standard effective date|A&C Accounting And Tax Services
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