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New Accounting Standards and Upcoming Effective Dates for Public and Private Companies
Key accounting rules and standards in 2026 focus on enhancing transparency in joint ventures, revising software capitalization, and adopting new tax reporting requirements. Major updates include FASB's guidance on joint venture equity (ASU 2023-05) and new reporting for qualified tips/overtime. Key shifts also include potential SEC moves to semi-annual reporting. [1, 2, 3, 4]
Here are the key accounting rules, standards, and updates effective or relevant for 2026:
FASB Accounting Standards Updates (ASU)
- Joint Venture Formation (ASU 2023-05): For joint ventures formed on or after Jan. 1, 2025, with impacts lasting into 2026 reporting, entities must measure contributed net assets and goodwill at fair value upon formation.
- Software Cost Capitalization: As of April 2026, FASB clarified that software costs must be tagged differently based on whether they are for internal use or for sale/lease, requiring more granular reporting in digital filings.
- Debt-Related Updates: New standards from 2024, such as ASU 2024-01 regarding stock compensation and ASU 2024-03 on expense disaggregation, are fully integrated into 2026 reporting cycles.
- Dividends on Preferred Stock: Effective Dec. 15, 2026, new standards affect the initial measurement of paid-in-kind dividends on certain equity-classified preferred stock. [1, 2, 3, 4, 5]
Tax and Payroll Changes (2026 Tax Year)
- Tip and Overtime Reporting: Employers face new requirements to separately report qualified tips and overtime compensation on Form W-2, necessitating payroll system updates.
- Retirement Plan Catch-ups: Under the SECURE 2.0 Act, high-income earners (those with 2025 wages over \(\$150,000\)) must make catch-up contributions to 401(k), 403(b), and 457(b) plans as after-tax Roth contributions.
- Standard Deduction Increases: The standard deduction for 2026 rises to \(\$32,200\) for married couples filing jointly and \(\$16,100\) for single taxpayers. [1, 2, 3]
Regulatory and International Updates
- SEC Quarterly Reporting: The SEC is preparing proposals for April 2026 to potentially make quarterly earnings reports optional, allowing public companies to report semi-annually.
- Sustainability Standards: The European Commission is finalizing voluntary sustainability reporting standards, referencing a VSME (Voluntary SME) standard for smaller entities.
- Currency Exchange: Amendments to IAS 21 for 2026 reporting provide specific guidance on determining the exchange rate when a currency is not exchangeable. [1, 2, 3]
Practice and Compliance
- CPA Mobility: About 10 states are expected to introduce legislation in 2026, aligning with the new, individual-based mobility model for CPAs.
- Internal Controls:
Reference to this article:
arch.bdo.com/new-accounting-standards-and-upcoming-effective-dates
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