In response to the COVID-19 pandemic, the FASB has issued Accounting Standards Update (ASU) No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities, which officially delays the effective dates of the revenue recognition and lease accounting rules for certain entities.
Revenue from Contracts with Customers, Topic 606 was originally effective for companies with fiscal year-ends beginning after December 15, 2019. With the FASB update, the effective date is now delayed for one year. Additionally, if companies with calendar year-ends have not yet issued (or made available for issuance) their financial statements, they can also defer the effective date for one year. The deferral is optional and companies may elect to follow the original effective date.
Leases, Topic 842 was originally effective for fiscal years beginning after December 15, 2020 (calendar year 2021). The FASB update defers the effective date for one year to fiscal years beginning after December 15, 2021 (calendar year 2022). Early application is permitted.