This publication summarizes the new accounting standards with mandatory[1] effective dates in the first quarter of 2024 for public entities, as well as new standards that take effect in annual 2023 financial statements for nonpublic entities. Those effective dates reflect the deferral of certain major standards provided in ASU 2019-10.
In the next filing season, calendar year-end public entities will prepare their annual 2023 financial statements, followed closely by their March 31, 2024, first quarter reports. Under SAB 74, entities will disclose in their 2023 annual filings the expected impact of adopting the FASB’s new standards on their financial statements. Standards issued after this publication’s date are unlikely to affect first-quarter financial statements, but entities consider them in preparing SAB 74 disclosures. For many public entities, the most significant first quarter change will be adoption of recent changes to equity securities subject to contractual sale restrictions.[2]
On a similar timeline, calendar year-end nonpublic entities will prepare their annual 2023 financial statements reflecting standards that took effect in 2023. Nonpublic entities that report on a calendar year adopt the credit losses[3] standard effective January 1, 2023, for a calendar year-end reporting date as of December 31, 2023.
Early adoption is generally permitted for all standards summarized herein, but each ASU has specific transition guidance, and early adoption may have been limited to certain periods or circumstances.
Accounting Standards Updates Effective for Calendar-Year Public Entities as of January 1, 2024
| Pronouncement | Effective Date |
| ASC 323, Equity Method and Joint Ventures | |
| ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method | Effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. |
| ASC 405-50, Liabilities Supplier Finance Programs | |
| ASU 2022-04, Disclosure of Supplier Finance Program Obligations | Amendment requiring rollforward information is effective for fiscal years beginning after December 15, 2023.
All remaining amendments in this ASU should already be in effect. |
| ASC 820, Fair Value Measurement | |
| ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions | Effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. |
| ASC 842, Leases | |
| ASU 2023-01, Common Control Arrangements | Effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. |
| ASC 470-20, Debt with Conversion smaller reporting companies and Other Options
ASC 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity |
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| ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity | This ASU should already be in effect for SEC filers excluding smaller reporting companies. For SEC filers classified as, the ASU is effective for fiscal years starting after December 15, 2023, including interim periods within those fiscal years. |
Accounting Standards Updates Effective for Calendar-Year Nonpublic Entities as of January 1, 2023
| Pronouncement | Effective Date |
| ASC 326, Financial Instruments-Credit Losses | |
| Ø ASU 2016-13, Measurement of Credit Losses on Financial Instruments | For non-SEC filers, the standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. |
| Ø ASU 2018-19, Measurement of Credit Losses on Financial Instruments | The amendments in this ASU must be adopted concurrently with ASU 2016-13. |
| Ø ASU 2019-04, Codification Improvements | The amendments for Topics 1, 2, and 5 in this ASU must be adopted concurrently with ASU 2016-13 |
| Ø ASU 2019-05, Targeted Transition Relief | The amendments in this ASU must be adopted concurrently with ASU 2016-13 |
| Ø ASU 2019-10, Effective Dates | The amendments in this ASU must be adopted concurrently with ASU 2016-13 |
| Ø ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses | The amendments for Topics 6 and 7 in this ASU must be adopted concurrently with ASU 2016-13. All remaining amendments for this ASU should already be in effect. |
| Ø ASU 2020-03, Codification Improvements to Financial Instruments | The amendments in this ASU must be adopted concurrently with ASU 2016-13 |
| Ø ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures | The amendments in this ASU must be adopted concurrently with ASU 2016-13 |
| ASC 405-50, Liabilities Supplier Finance Programs | |
| ASU 2022-04, Disclosure of Supplier Finance Program Obligations | Effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment requiring rollforward information, which is effective for fiscal years beginning after December 15, 2023. |
[1] Standards that become effective later but that can be early adopted currently are excluded.
[2] ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
[3] ASC 326, Measurement of Credit Losses on Financial Instruments, and related amendments