The Financial Accounting Standards Board officially delayed the effective dates of its accounting standards for leases, credit losses, hedging and long-duration insurance contracts by issuing a pair of accounting standards updates Friday.

The move had been expected after the board members voted last month to push back the effective dates of the standards after issuing proposed accounting standards updates in August (see FASB votes to defer effective dates of major standards). The move will especially help private companies and nonprofits, which will now have additional time to implement the standards after learning from the experiences of large public companies. The delays also apply to “smaller reporting companies” — defined as those with a public float of less than $250 million; or annual revenue of less than $100 million and either no public float or a public float of less than $700 million — but mainly for the insurance and credit loss standards. The hedging and leasing standards have already taken effect for public companies since January 2019, and were set to take effect in January 2020 for private companies and nonprofits. The effective dates would now move out to January 2021 for private companies and nonprofits.

The credit losses standard, commonly referred to as CECL because of the Current Expected Credit Loss model it uses, was originally set to take effect in January 2020 for SEC filers, except for smaller reporting companies, which are supposed to begin implementing it in January 2021. The changes would push back the dates for smaller reporting companies and all other public business entities from January 2021 to January 2023, and for private companies and nonprofits from January 2021 to January 2023.

The insurance contracts standard would be delayed for both public and private companies, as well as for nonprofits. The deferral moves the effective date for SEC filers from January 2021 to January 2022. Other public business entities, including smaller reporting companies, would see the effective date move from January 2021 to January 2024. For private companies and nonprofits, the effective date would move from January 2022 to January 2024.

The first accounting standards update, ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):Effective Dates, finalizes the effective date delays for private companies, not-for-profits, and smaller reporting companies applying the CECL, leases and hedging standards. The other update, ASU No. 2019-09, Financial Services—Insurance (Topic 944): Effective Date, finalizes the effective date delays of the insurance standard for all insurance companies that issue long-duration contracts, such as life insurance and annuities. The chart below details all the effective date changes.

FASB acting technical director Shayne Kuhaneck discussed the deferral of the effective dates on Monday at Financial Executives International’s Current Financial Reporting Insights conference in New York. “Our research and interactions with stakeholders indicated that implementation challenges are often far more significant for private companies, smaller public companies and not-for-profit organizations,” said Kuhaneck. “Access to resources, education and technology varies considerably among organizations of different sizes, and the board did not want those hurdles to block the path toward a successful implementation. We also observed that private and smaller public companies can learn a lot from the experiences of larger public companies. More time between effective dates means more learning. We also learned it’s more cost effective to take an integrated, holistic approach that coordinates accounting changes with the other changes needed to run a successful business, or what some refer to as a business approach to adopting accounting changes.”