FASB Holds February 15 Meeting
February 17, 2023
At its February 15, 2023, meeting, the FASB redeliberated its proposed Accounting Standards Update (ASU) Leases (Topic 842): Common Control Arrangements, which would amend certain provisions of ASC 842 that apply to arrangements between related parties under common control. Specifically, the Board made tentative decisions regarding the following:
- A practical expedient for private companies (as well as not-for-profit entities that are not conduit bond obligors and certain employee benefit plans) that would give such entities the option of using the written terms and conditions of a common-control arrangement when determining (1) whether a lease exists and (2) the subsequent accounting for the lease, including the lease’s classification.
- The accounting for leasehold improvements in common-control arrangements.
- The effective date, as well as the expected costs and benefits, of the amendments.
The Board directed its staff to begin drafting a final ASU for a vote by written ballot. For more information, see the tentative Board decisions and meeting handout on the FASB’s Web site