FASB Proposes to Defer Effective Date for Standard on Long-Duration Insurance Contracts
August 22, 2019
The FASB has issued a proposed Accounting Standards Update (ASU), Financial Services — Insurance (Topic 944): Effective Date, which would give insurance companies additional time to implement the Board’s August 2018 standard on long-duration contracts, ASU 2018-12.
The proposed ASU states the following regarding how entities would be affected by the deferral:
For SEC filers, excluding entities eligible to be [smaller reporting companies] as defined by the SEC, the amendments in Update 2018-12 would be effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. . . . Early application of the amendments in Update 2018-12 would be permitted.
For all other entities, the amendments in Update 2018-12 would be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early application of the amendments in Update 2018-12 would be permitted.
The proposed deferral is consistent with the FASB’s new philosophy to stagger the effective dates of major standards so that the standards are effective for larger public companies at least two years before they are effective for all other entities.
Comments on the proposed ASU are due by September 20, 2019. For more information, see the proposal and press release on the FASB’s Web site.