FASB Accounting Standards Update (ASU) No. 2023-01, Leases (Topic 842): Common Control Arrangements.
FASB Accounting Standards Codification Topic 842, Leases.
This represents a change from the proposed ASU, which stated that leasehold improvements associated with common-control leases should be amortized over the economic life of the leasehold improvements rather than their useful life. The FASB made the change primarily because (1) the amortization period should be limited to the period in which the common-control group can direct the use of the underlying asset, (2) amortizing the leasehold improvements over the useful life to the common-control group would be consistent with the period used by a lessee when applying the impairment guidance in ASC 360, and (3) it could be challenging for a lessee to determine the economic life of a leasehold improvement since it may be required to consider factors outside the common-control group in such circumstances.
FASB Accounting Standards Update No. 2016-02, Leases (Topic 842).