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Effective date and transition
10.1 Chapter overview
The leases standard is applicable for most public business entities starting in 2019. Adopting the leases
standard could be a significant undertaking. Some reporting entities will need a significant amount of
lead time to make the necessary changes to their systems and processes. The standard includes some
practical expedients to ease the burden of transition.
This chapter discusses the effective date and transition guidance. See LG 9 for details regarding
transition related disclosures.
10.2 Effective date
The following table summarizes the effective dates for adopting the leases standard. Early adoption is
permitted for both public and nonpublic business entities.
Figure 10-1
Leases standard effective dates
Type of entity Effective date
Public business entities □ Fiscal years, and interim periods within
1
those fiscal years, beginning after
A not-for-profit entity that has issued, or is a December 15, 2018
conduit bond obligor for, securities that are
traded, listed, or quoted on an exchange or over-
the-counter market
An employee benefit plan that files or furnishes
financial statements to the SEC
Other □ Fiscal years beginning after December 15,
2019 and interim periods within fiscal
years beginning after December 15, 2020
1 On July 20, 2017, the SEC Observer to the EITF meeting said the SEC staff would not object if entities that are considered
public business entities only because their financial statements or financial information is required to be included in another
entity’s SEC filing use the effective dates for private companies when they adopt ASC 842.
The effective date for public business entities, certain not-for-profit entities, and employee benefit
plans requires calendar year-end reporting entities to adopt the leases standard on January 1, 2019.
These entities will first report leases in accordance with the leases standard in their 2019 interim and
annual financial statements, unless they choose early adoption. If adopted in 2019, reporting entities
may need to adjust the comparative financial statements for fiscal years 2018 and 2017 depending on
the transition method applied, as discussed in LG 10.3.
Other entities have an additional year to comply with the leases standard. In addition, they may
present their interim financial statements using legacy guidance in the year of adoption. These entities
will first report leases in accordance with the leases standard in their 2020 annual financial statements
and 2021 interim financial statements, unless they choose early adoption.
10-2
