When does ASC 842 come into effect?
For private companies, the effective date is January 1, 2021.
For public companies, the effective date is January 1, 2019.
ASC 842, the new lease accounting standard, was introduced on February 25, 2016, with different effective dates for public and private companies. The standard was originally intended to become effective in the fiscal year following December 15, 2017 for public companies (i.e. the fiscal year starting on January 1, 2018) and the fiscal year following December 15, 2018 for private companies (i.e. the fiscal year starting on January 1, 2019).
These dates were later amended, however. After the amendment, the standard will come into effect in the fiscal year following December 15, 2018 for public companies (the fiscal year starting January 1, 2019) and the fiscal year following December 15, 2020 for private companies (the fiscal year starting January 1, 2021).
This means the time for public companies to comply with ASC 842 has passed, and the time for private companies is ticking away quickly. ASC 842 is a comprehensive change for lease accounting, and requires organizations to prepare months in advance.
