Due to the ongoing pandemic, the Financial Accounting Standards Board (FASB) voted to delay the new standards on long-duration insurance contracts for one year, according to Accounting Today. The board voted on the matter last week and plans to release an update confirming the change later this year.

The new effective date for large public companies will be Dec. 15, 2022. For all other entities, it will be Dec. 15, 2024. Companies can early-adopt as of the prior period or earliest period presented, which should reduce the number of comparative reporting periods from two to one.

The standard, Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, introduced a number of changes when it was first approved two years ago. The update changed the rules on assumptions used to measure the liability for future policy benefits for traditional and limited-payment contract; measurement of market risk benefits; amortization of deferred acquisition costs; and disclosures.

The initial effective date was 2020, but last November, the FASB agreed to push it forward to 2021. With this extension now approved, after first proposing the idea in June, it will be the second time the board has delayed the standard's implementation. The delay is in response to concerns from entities about their ability to effectively implement the new standard while, at the same time, managing the pandemic's effects.