FASB Proposes Amendments to Leasing Guidance
October 20, 2020
The FASB has issued a proposed Accounting Standards Update (ASU), Leases (Topic 842): Targeted Improvements. The proposed ASU would amend three key aspects of the new leasing standard:
- The proposal would revise the lease classification requirements for lessors for “leases in which the lease payments are predominantly variable by requiring lessors to classify and account for those leases as operating leases.”
- Lessees would have “the option to remeasure lease liabilities for changes in a reference index or a rate affecting future lease payments at the date that those changes take effect; that option would be available as an entity-wide accounting policy election.”
- The requirements for both lessees and lessors would change with respect to situations in which there is “an early termination of some leases within a contract that does not economically affect the remaining leases in that contract.”
For more information, see the press release on the FASB’s Web site.