FASB Releases PIR Report on Leasing Standard

The FASB has released a postimplementation review (PIR) report on its leasing standard (ASC 842). The report notes that financial statement users are “generally satisfied” with the standard’s requirements for lessors, which “did not incur significant costs” either during the initial implementation phase or “on an ongoing basis.” On the other hand, the standard’s requirements for lessees, while resulting in more decision-useful information for users and investors, were found to be considerably more costly than expected both upon initial implementation and on an ongoing basis. The Board indicates that this is “primarily because entities’ existing systems and processes were often not able to account for operating leases on the balance sheet.”

For more information, see the press release on the FASB’s Web site.