Short List of New GAAP Accounting Standards Effective in 2022

The past two years have been a whirlwind of change in the accounting industry. To help you stay on track, we’ve compiled a short list of new 2022 GAAP accounting standards that are effective now, so you can make sure you’re set up for a smooth, GAAP-filled year.

1. Leases (Topic 842)

The “lease standard” is finally here and now applies to all entities.

Since its introduction in 2016, the standard has been postponed and updated several times. Although applicable for certain entities earlier, this standard must now be implemented by all entities reporting on a GAAP basis for calendar year 2022 and fiscal years ending in 2023.

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Implementing the New FASB Lease Accounting Standard: Identifying the Lease

As discussed in our previous article, now is the time to begin the process of implementing Accounting Standards Update No. 2016-03, Leases (Topic 842).

The first step companies must take to effectively implement the new FASB lease accounting standard is reviewing all significant contracts and agreements to determine if the contract, or part of the contract, falls within the scope of the new standard and contains a lease. The majority of agreements will be easily identifiable as a lease based on the nature and/or terms of the agreement and the underlying asset (e.g., office space, vehicles,

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Ready or Not, It’s Time to Implement the New Lease Accounting Standard

On November 10, 2021, the FASB board voted unanimously to reject a request for a two-year extension to the effective date of the new lease accounting standard. Private companies and not-for-profit organization adoption requirements are now imminent and will not be subject to any further extensions.

Introduction:

In February 2016, Accounting Standards Update No. 2016-03, Leases (Topic 842) was issued with the intent to improve financial reporting for leasing transactions. After numerous extensions, the guidance will now be effective for fiscal years beginning after December 15, 2021 for private entities. Thus, for calendar year entities, the guidance will be effective January 1,

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FASB to Propose Delay to Effective Dates of Leases and Revenue Recognition for Franchisors

May 21 Update: The FASB has voted to officially delay the effective dates for the Leases (Topic 842) and Revenue from Contracts with Customers (Topic 606) standards. The Leases (Topic 842) standard is now effective for private companies and private not-for-profit (NFP) entities for fiscal years beginning after December 15, 2021. The standard is effective for public NFPs that have not yet issued financial statements (or made them available for issuance) for fiscal years beginning after December 15, 2019.

The Revenue from Contracts with Customers (Topic 606) standard has been delayed for franchisors that are not public business entities and all entities that have not yet issued financial statements (or made them available for issuance) for fiscal years beginning after December 15,

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Where to Start with New Accounting Standards

There are now several new accounting standards that not-for-profits will need to implement over the next few years. With more likely coming down the pipeline, many not-for-profits are asking for advice to follow when implementing new standards. Here are steps to consider:

Getting Started:

  • Designate an internal champion to perform an assessment of the new standard’s impact on the organization.
  • The first order of business should be to determine if the standard applies to your organization. You can find electronic versions of the new standards at fasb.org.
  • Read the standard, and do not skip the Background Information and Basis for Conclusions section;

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