FASB Issues Proposal to Delay Implementation of Long-Duration Insurance Standard and Facilitate Early Adoption

In response to the COVID-19 pandemic, the FASB has issued a proposed Accounting Standards Update (ASU), Financial Services — Insurance (Topic 944): Effective Date and Early Application, that would grant insurance companies an additional year to implement ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts.

The proposal would also make early adoption easier by providing transition relief to insurers that do not need the extra time. Under the proposed ASU, “[T]he early application transition date would be the beginning of the prior period presented (rather than the beginning of the earliest period presented), thereby aligning the early application transition date with the standard transition date for SEC filers.”

Comments on the proposed ASU are due by August 24, 2020. For more information, see the press release on the FASB’s Web site.