Preface
Preface
We are pleased to present the 2023 edition of Leases (the
“Roadmap”). Since the issuance of ASU 2016-021 (codified in ASC 842) on February 25, 2016, the FASB has continued to discuss
and make updates to ASC 842 on the basis of implementation questions raised,
challenges identified by stakeholders, and the Board’s postimplementation review
process.2
The body of the Roadmap combines the requirements in ASC 842 with
Deloitte’s interpretations and examples in a comprehensive, reader-friendly format.
In addition, the Roadmap highlights (1) the requirements of ASC 842 that
significantly differ from those in ASC 840 and IFRS 16 and (2) recent
standard-setting developments (through September 15, 2023). In this Roadmap, it is
assumed that ASU 2018-20 has been adopted or is being adopted in connection with an
entity’s adoption of ASC 842.
We hope that this publication will enable entities to deal with some of the more
challenging aspects of ASC 842. This publication has been developed for readers who
have been following every development of the standard as well as for those who are
working through the new guidance for the first time. That is, it may function as a
quick resource guide for those who have a specific question and are looking for a
clear answer, or it may serve as an all-encompassing guide for those who are still
building up their knowledge base related to the new leasing standard.
Although the mandatory effective date for public companies has
passed, challenging questions remain, and we expect new implementation questions to
continue emerging. Accordingly, we will continue to develop guidance to help
stakeholders with implementation.
Note that in this year's update of the Roadmap, we have continued
our process of converting text that was previously in Q&A format into regular
text format. Although not all Q&As are being converted this year, we expect to
convert the remaining ones as part of subsequent updates. See Appendix H for a mapping of
the Q&As (and example renumbering as applicable) that have been converted thus
far to their respective new sections for 2023.
Further, the updated edition of this Roadmap includes some new
interpretations and certain modifications to previously expressed views to reflect
our latest thinking as well as input from standard setters and regulators. Appendix I highlights all new
content as well as any substantive revisions to previous content.
Be sure to check out On the
Radar (also available as a
stand-alone publication), which
briefly summarizes emerging issues and trends related to the
accounting and financial reporting topics addressed in the
Roadmap.
We encourage you to use this Roadmap as a guide throughout your
application of ASC 842 and to contact us with any questions or suggestions for
future improvements. However, the Roadmap is not a substitute for consulting with
Deloitte professionals on complex accounting questions and transactions.
We hope that you find this Roadmap helpful in achieving a successful
adoption of the new guidance as well as in navigating the ongoing accounting
requirements for leases after adoption.
Footnotes
1
For a list of the titles of standards and other literature
referred to in this publication, see Appendix F. For a list of
abbreviations used in this publication, see Appendix G.
2
For a complete list of proposed and final ASUs and more
information about how the ASUs issued amend certain aspects of ASC 842, see
Chapter
17.
Videos in This Roadmap
Process for Identifying a Lease
Periods Covered by Options
Lease Classification Criteria
Sections 8.3.3
and 9.2
Accounting for Modifications
Lessor’s Accounting for Certain Leases With
Variable Payments