AccountingLink

    Leases

    5 February 2018

    Comment letter - FASB proposal to add a transition option and practical expedient for lessors to the new leases standard
    In our comment letter, we supported the FASB’s efforts to reduce the cost and complexity of applying the guidance in ASC 842, Leases. However, we believe the Board could provide additional relief by giving entities the option to use an alternative transition method that would allow them to apply the recognition and subsequent measurement guidance in ASC 842 to existing leases at the date of initial application. In addition, we expressed concern that the proposed criteria for use of the lessor practical expedient would inadvertently limit the population of leases to which the practical expedient could be applied.

    25 January 2018

    To the Point - FASB issues transition practical expedient for land easements and clarification on applying ASC 842
    The FASB issued final guidance to provide an optional transition practical expedient for land easements in the new leases standard that permits an entity to continue applying its current policy for accounting for land easements that exist as of or expire before the effective date of ASC 842, Leases. An entity that elects the practical expedient must apply it to all of its existing or expired land easements that it didn’t previously account for under ASC 840.

    10 January 2018

    Financial Reporting Developments - Lease accounting - Accounting Standards Codification 842, Leases
    We have updated our FRD publication on accounting for leases under ASC 842 to clarify and enhance our interpretive guidance on how to apply the modified retrospective transition method and other topics. The updates also include recent standard-setting activity and proposed amendments to ASC 842. Refer to Appendix E of the publication for a summary of the updates.

    9 January 2018

    To the Point - FASB proposes adding transition option and practical expedient for lessors to new leases standard
    The FASB proposed adding a transition option to the new leases standard that would allow entities to not apply the new guidance in the comparative periods they present in their financial statements in the year of adoption. The FASB also proposed a practical expedient that would provide lessors with an option to combine lease and non-lease components when certain criteria are met. Comments are due by 5 February 2018.

    14 November 2017

    Financial Reporting Developments - Lease accounting
    We have updated our Financial reporting developments (FRD) publication primarily to reflect amendments to the leases guidance that will be effective when an entity adopts the new revenue recognition standard (ASC 606). The updates highlight the effect the new revenue guidance will have on the accounting for arrangements that contain leases. Refer to Appendix D of the publication for a list of updates. This publication does not address the accounting for leases under the new leases standard, which is codified in ASC 842. That new standard, which will supersede ASC 840, requires lessees to recognize assets and liabilities for most leases but recognize expenses on their income statement in a manner similar to today’s accounting.

    13 November 2017

    Comment Letter - Proposed technical corrections and improvements to new leases standard
    In our comment letter, we support the FASB’s effort to address feedback from stakeholders about how to apply certain aspects of ASC 842, Leases. We agree that the proposed changes would clarify the new leases standard and correct guidance that could be misinterpreted or does not represent the intention of the FASB. We also recommend additional clarifications.

    25 October 2017

    Comment letter - FASB proposal to add transition practical expedient for land easements and clarify how to apply ASC 842
    In our comment letter, we support the FASB’s objective to reduce the cost and complexity of applying the transition guidance in ASC 842, Leases. We believe the proposal could contribute to that objective by helping to clarify which land easements should be evaluated under ASC 842. However, we recommend that the Board clarify that the practical expedient would not apply to land easements previously accounted for as leases. In addition, we suggest that the Board consider additional clarifications on how to evaluate land easement contracts after the effective date of the new leases standard.

    2 October 2017

    To the Point - FASB proposes narrow amendments and technical corrections to the new leases standard
    The FASB proposed narrow amendments and technical corrections to clarify how to apply certain aspects of the new leases standard. The proposed clarifications would address the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments, among other things. Comments are due by 13 November 2017.

    28 September 2017

    To the Point - FASB proposes transition practical expedient for land easements and clarification on applying ASC 842
    The FASB proposed adding a transition practical expedient for land easements in the new leases standard that would permit an entity to continue applying its current accounting policy for land easements that existed or expired before the standard’s effective date. The proposal also would clarify that an entity would evaluate whether land easements are leases under the new standard before applying the guidance on intangible assets. Comments are due by 25 October 2017.

    19 May 2016

    Technical Line - How the FASB’s new leases standard will affect oil and gas entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for oil and gas entities.

    19 May 2016

    Technical Line - How the FASB’s new leases standard will affect power and utilities entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for power and utilities entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect airline entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for airline entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect automotive entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for automotive entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect engineering and construction entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for engineering and construction entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect financial services entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for financial services entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect health care entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for health care entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect mining and metals entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for mining and metals entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect real estate entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for real estate entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect retail and consumer products entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for retail and consumer products entities.

    14 April 2016

    Technical Line - How the FASB’s new leases standard will affect telecommunications and cable entities
    The FASB’s new leases standard significantly changes the accounting for leases and could have far-reaching implications for many entities. Our Technical Line discusses key implications for telecommunications and cable entities.

    26 February 2016

    Let’s talk: Practical matters - Leases make their way onto the balance sheet
    New US GAAP and IFRS standards will require lessees to recognize most leases on their balance sheets and make other changes to lease accounting. All companies with significant leasing activities should review the standards and begin thinking about the implications now. Starting early is the best way to avoid unwanted surprises and costly mistakes. This publication complements our recent To the Point on the FASB’s new standard and outlines what companies should consider as they move through the implementation period.

    25 February 2016

    To the Point - FASB issues final guidance that will change the accounting for leases
    The FASB issued final guidance that requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to today’s accounting. The guidance also eliminates today’s real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases.