Potential major deferrals in pending accounting standards reflect not only the enormity of change that’s occurring. They also represent a symptom of the growing tension in financial reporting between estimation and precision.
The Financial Accounting Standards Board is pushing the pause button on some major accounting changes, including CECL for smaller reporting companies, as the system tries to catch up with huge change in recent years and prepare for more change still to come. The board plans to propose carving out smaller reporting companies as defined by the Securities and Exchange Commission from the Jan. 1, 2020, adoption of CECL and give them and other non-public companies until 2023 to comply. The batch of delays would also include a one-year deferral for private companies to apply new rules on lease accounting, and it would delay a new rule on insurance contracts for all entities.
