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Appendix E — Stakeholder Activities

E.3 FASB Activities

E.3 FASB Activities

This Roadmap discusses the FASB’s standard setting through April 15, 2025.

Footnotes

2
See Section E.3.2 for additional FASB activity related to the accounting for impairment of operating lease receivables.
3
ASU 2019-10 delayed the effective date of the leasing standard (ASU 2016-02) for all nonpublic companies. ASU 2020-05 further delayed the effective date for all nonpublic companies, as well as for certain public NFPs. The effective date for nonpublic companies is annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The effective date for public NFPs that qualify for the deferral under ASC 842-10-65-1(a) is annual periods beginning after December 15, 2019, and interim periods therein. The effective date for all other public companies remained unchanged. The delayed effective date also applies to all ASUs associated with ASU 2016-02.
4
See footnote 3.
5
See footnote 3.
6
See footnote 3.
7
See footnote 3.
8
ASC 326 includes both legacy impairment guidance moved from other Codification sections and credit losses guidance introduced by ASU 2016-13. Some of the guidance moved from other Codification sections was also amended by ASU 2016-13.
9
The purpose of the TRG is not to issue guidance but instead to seek and provide feedback on potential issues related to implementation of the credit loss standard.
10
Quoted material is from the TRG’s June 11, 2018, meeting handout.
11
See footnote 3.
12
Public companies are PBEs, as well as certain NFPs and employee benefit plans as described above in ASC 842-10-65-1(a).
13
The deferral in ASU 2020-05 applied to public NFPs that had not issued financial statements or made financial statements available for issuance as of June 3, 2020. Public NFPs that have issued financial statements or have made financial statements available for issuance before that date must comply with the effective dates prescribed for public companies above.
14
For PBEs and entities within the scope of ASC 842-10-65-1(a), ASU 2021-05 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. For all other entities within the scope of ASC 842-10-65-1(b), the ASU is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.
15
ASC 842 does not address what is meant by the phrase “class of underlying asset.” Before ASU 2021-09, entities were allowed to make other accounting policy elections by class of underlying asset, so entities may already have policies in place for how to define asset class. See Section 4.3.3.1 for information about applying this concept.
16
ASC 842-20-50-10, which is added by ASU 2021-09, states: “A lessee that makes the accounting policy election in paragraph 842-20-30-3 to use a risk-free rate as the discount rate shall disclose its election and the class or classes of underlying assets to which the election has been applied.”
17
The cumulative-effect adjustment to the lease liability and corresponding ROU asset should be calculated by using the remaining lease term and the discount rate as of the date of the adoption of ASU 2021-09. This calculation applies to all leases existing as of the ASU’s adoption date.
18
As clarified by ASU 2021-09, the risk-free rate can only be applied for lessee leases when the rate implicit in the lease is not readily determinable.
19
This represents a change from the proposed ASU, which stated that leasehold improvements associated with common-control leases should be amortized over the economic life of the leasehold improvements rather than their useful life. The FASB made the change primarily because (1) the amortization period should be limited to the period in which the common-control group can direct the use of the underlying asset, (2) amortizing the leasehold improvements over the useful life to the common-control group would be consistent with the period used by a lessee when applying the impairment guidance in ASC 360, and (3) it could be challenging for a lessee to determine the economic life of a leasehold improvement since it may be required to consider factors outside the common-control group in such circumstances.
20
Under IFRS 16, an entity may exclude leases for which the underlying asset is of low value from its ROU assets and lease liabilities. See paragraphs B3–B8 of IFRS 16 for information on assessing whether an asset is of low value. Also see Appendix B for a summary of the differences between ASC 842 and IFRS 16.
21
See Sections 4.1 and 4.2 for additional guidance on identifying the separate lease and nonlease components, respectively. See Section 4.4 for guidance on determining and allocating consideration in the contract to the identified lease components.