15.5 Annual and Interim Disclosures

This section outlines the comparative-period disclosure requirements (i.e., for the comparative annual periods presented in an entity’s financial statements) and interim disclosure requirements under ASC 842.

15.5.1 Comparative Periods

Some of the disclosure requirements outlined in the sections above start with the wording “for each period presented in the financial statements, a lessee shall disclose.” These statements typically accompany quantitative requirements such as those in ASC 842-20-50-4 (lessee amounts recognized in the balance sheet). Therefore, these quantitative disclosures should be presented comparatively with respect to the prior annual periods presented. Other requirements, such as the qualitative requirements, do not necessarily lend themselves to separate disclosures for the comparative balance sheet dates presented and therefore may be discussed only as of the reporting date (rather than on a comparative basis).

15.5.2 Interim Disclosures

Interim disclosure requirements are outlined in ASC 270. Generally, ASC 270 requires that entities report significant changes in financial position (see ASC 270-10-50-4) and changes in accounting principles and estimates (see ASC 270-10-45-12 through 45-16), along with other information that helps users understand the interim financial reporting results compared with those for its most recent annual period.

In addition, ASC 270 requires lessors to provide the following disclosure on both an interim and annual basis:

ASC 270-10

50-6A A lessor shall disclose a table of all lease-related income items in its interim financial statements (see paragraph 842-30-50-5 for lease-related income items).

Other than this one explicit requirement for lessors, no disclosures are prescribed for lessees and lessors on an interim basis. The aforementioned lease-related income items required for lessors are detailed in ASC 842-30-50-5 and further discussed in Sections 15.3.5.1.1 and 15.3.5.2.1.

Connecting the Dots

Interim Disclosures

While there are no explicit interim requirements, an entity may elect to provide interim lease disclosures in a manner consistent with how it provides disclosures in its annual financial statements if the entity’s leasing activities are significant or if there are significant changes in its leasing activities on an interim basis. Further, we believe that providing the required annual lease disclosures for each interim period could alleviate a significant amount of work at year-end. That is, it will most likely take entities significant time to compile the amount of information required, and discussed throughout this chapter, if it is accumulated at year-end for a full year of activity. Therefore, entities that have controls and processes in place to accumulate this information throughout the year may find it less burdensome to prepare their annual disclosures.

Confidential and Proprietary — for Use Solely by Authorized Personnel

This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.