New Accounting Standards and Upcoming Effective Dates for Public and Private Companies
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This publication summarizes the new accounting standards with mandatory effective dates in the first quarter of 2025 for public entities, as well as new standards that take effect in annual 2024 financial statements for nonpublic entities. We have also included links to BDO’s guidance on each pronouncement, as applicable. Standards that become effective later but that can be adopted earlier are excluded.
In the next filing season, calendar year-end public entities will prepare their annual 2024 financial statements, followed closely by their March 31, 2025, first quarter reports. Under SAB 74, entities will disclose in their 2024 annual filings the expected impact of adopting the FASB’s new standards on their financial statements. Standards issued after this publication’s date (see the FASB list of issued ASUs) are unlikely to affect first-quarter financial statements, but entities should consider them in preparing SAB 74 disclosures. For many public entities, the most significant changes will result from adopting the new segment reporting and income tax disclosure requirements.
On a similar timeline, calendar year-end nonpublic entities will prepare their annual 2024 financial statements reflecting standards that took effect in 2024. Nonpublic entities that report on a calendar year adopt the changes to accounting for convertible instruments and contracts in an entity’s own equity effective as of the year-end reporting date of December 31, 2024, which may require significant effort.
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. Please refer to BDO’s publications listed below and our overview, Accounting for Changes and Error Corrections for more information.
Accounting Standards Updates Effective for Calendar-Year Public Entities as of January 1, 2025
| Pronouncement | Effective Date | BDO Publications |
|---|---|---|
| ASU 2023-07, Improvements to Reportable Segment Disclosures | Effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. | Bulletin: New Segment Reporting Disclosures |
| ASU 2023-08, Accounting for and Disclosure of Crypto Assets | Effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. | Bulletin: FASB Issues Accounting Standard for Certain Crypto Assets Publication: Accounting for Cryptocurrencies |
| ASU 2024-01, Scope Application of Profits Interest and Similar Awards | Effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. | Bulletin: FASB Clarifies Scope Application of Profits Interest and Similar Awards Blueprint: Share-based Payments Under ASC 718 |
| ASU 2023-09, Improvements to Income Tax Disclosures | Effective for annual periods beginning after December 15, 2024. | Bulletin: FASB Issues ASU to Improve Income Tax Disclosures |
| ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60), Recognition and Initial Measurement | Effective for joint ventures formed on or after January 1, 2025. | Bulletin: Joint Venture Formations Blueprint: Business Combinations Under ASC 805 |
Accounting Standards Updates Effective for Calendar-Year Nonpublic Entities as of January 1, 2024
| Pronouncement | Effective Date | BDO Publications |
|---|---|---|
| ASU 2023-01, Leases (ASC 842) Common Control Arrangements | Effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. | Bulletin: FASB Addresses Lease Accounting Issues Associated With Common Control Arrangements Blueprint: Accounting for Leases Under ASC 842 |
| 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. | Bulletin: Disclosure of Supplier Finance Program Obligations |
| ASU 2022-01, Fair Value Hedging—Portfolio Layer Method | Effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. | Bulletin: Fair Value Hedging – Portfolio Layer Method |
| ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers | Effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. | Bulletin: Contract Assets and Contract Liabilities Acquired in a Business Combination Blueprint: Business Combinations Under ASC 805 |
| ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity | Effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. | Bulletin: Induced Conversions of Convertible Debt Instruments Blueprint: Issuer's Accounting for Complex Financial Instruments |
| ASU 2019-09, Effective dates (an amendment to ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Insurance)) | Effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. | Bulletin: FASB Improves Accounting for Long-Duration Contracts |