A Roadmap to Applying the New Leasing Standard (December 2019)
- Download the PDF version (available without subscription; not updated after issuance).
- View the active version (subscription required; updated as warranted). For subscribers, links to substantive changes made to the Roadmap since its issuance, if any, will be provided below.
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. We hope that this publication will enable entities to
deal with some of the more challenging aspects of ASC 842. This December 2019 update
does not reflect the issuance of ASU 2019-10, which extended the effective date of
the new leasing standard for non-PBEs by one year. For more information about ASU
2019-10, see Deloitte’s November 19, 2019, Heads Up.
Be sure to check out other titles in Deloitte’s Roadmap
series, our comprehensive, easy-to-understand collection of
accounting guides on selected topics of broad interest to the financial reporting
community.
Summary of Changes Since Issuance (Links Are Available to Subscribers Only)
The following new Q&As were added to this Roadmap since its issuance in February 2019:
Date of Change | Q&A Reference | Title |
|---|---|---|
|
December 6, 2019
|
Noncoterminous Lease and Nonlease Components
| |
|
December 6, 2019
|
Lease Classification Reassessment — How an Entity
Considers Unamortized Balances When Performing the Fair
Value Classification Test
| |
|
December 6, 2019
|
Reassessment of Whether a Contract Is or Contains a
Lease
| |
|
December 6, 2019
|
Lease Modification With Additional Right of Use and
Changes to Existing Right of Use
| |
|
December 6, 2019
|
Forward-Starting Lease for an Asset Subject to an
Existing Lease
| |
|
December 6, 2019
|
Reimbursement of Capital Improvement That Is Not a
Nonlease Component
| |
|
December 6, 2019
|
Sale and Leaseback With a Residual Value Guarantee and a
Fair Value Purchase Option
| |
July 17, 2019 | Rights to Use Land That Include More Than Natural Resource Rights | |
July 17, 2019 | Impact of ROU Asset Impairment Indicator on Lease Term | |
July 17, 2019 | “Key Money” Payment Made to an Existing Lessee to Assume a Lease | |
July 17, 2019 | ROU Assets That Are Held for Sale — Amortization Considerations | |
July 17, 2019 | Reduction in Lease Term Versus Lease Termination | |
July 17, 2019 | Lease Modifications That Involve More Than One Change | |
July 17, 2019 | Lessor’s Accounting for an Operating Lease When Collectibility Subsequently Becomes Not Probable | |
July 17, 2019 | Recognition of a General Allowance for Operating Lease Receivables | |
July 17, 2019 | Income Statement Classification of General Allowance for Operating Lease Receivables |
The following other changes were made to this Roadmap since its issuance in February 2019:
Date of Change | Location of Change | Title | Description |
|---|---|---|---|
|
December 6, 2019
|
Noncancelable Period and Enforceable Period
|
Updated to clarify distinction between enforceable period
and lease term and to add Connecting the Dots —
Enforceability Is a Broad Concept
| |
|
December 6, 2019
|
Treatment of Payments to a Lessee When a Lease Is
Terminated and the Lessee Enters Into a New Lease for
Similar Assets
|
Amended Question 2 to discuss the impact of a contractual
requirement to enter into a new lease and to add an
example
| |
|
December 6, 2019
|
Estimated Economic Life Versus Depreciable Life
|
Expanded to address difference between definition of
economic life and definition of useful life
| |
|
December 6, 2019
|
Estimated Economic Life Versus Depreciable Life
|
Expanded to address difference between definition of
economic life and definition of useful life
| |
|
December 6, 2019
|
Lease Modification
|
Expanded to include Connecting the Dots — Accounting for
a Modification as a Separate Contract
Amended Connecting the Dots — Contract Modifications
Accounted for as a Separate Contract Under ASC 842 Are
Similar but Not Identical to Those Under ASC 606 to
highlight a difference between ASC 606 and ASC 842
| |
|
December 6, 2019
|
Accounting for Reimbursements of Repairs and Capital
Improvements
|
Added discussion of lessor accounting for reimbursements
of repairs and capital improvements by a lessee (this
discussion includes Q&A 9-18A)
| |
|
December 6, 2019
|
Accounting by the Deemed Owner of an Asset
|
Expanded discussion of seller-lessee accounting for a
financing obligation in a failed sale-and-leaseback
transaction
| |
|
December 6, 2019
|
Depreciation Accounting When the Lessee Is the “Deemed
Owner” and Fails to Qualify for Sale-and-Leaseback
Accounting
|
Expanded discussion of residual value in Question 2
| |
|
December 6, 2019
|
Relationship Between ASC 842 Maturity Analysis
Disclosures and Tabular Disclosure of Contractual
Obligations
|
Added discussion of lease payments included in the
tabular disclosure of contractual obligations for SEC
registrants
| |
|
December 6, 2019
|
Differences Between U.S. GAAP and IFRS Standards
|
Added discussion of difference between U.S. GAAP and IFRS
Standards with respect to modifications that reduce the
lease term for lessees
| |
July 17, 2019 | Lease Modifications That Involve More Than One Change | Added discussion of accounting considerations when a lease modification includes multiple changes | |
July 17, 2019 | Foreign Exchange Rate Considerations Related to Lease Modifications and Remeasurements | Expanded to address foreign exchange rate considerations related to lease remeasurement events | |
July 17, 2019 | Collectibility | Amended to reflect practice developments related to a lessor’s accounting for the collectibility of operating lease receivables | |
July 17, 2019 | Impact of Contingent Repurchase Provisions on Sale-and-Leaseback Accounting | Expanded discussion and added reference to Deloitte’s Revenue Roadmap | |
July 17, 2019 | Statement of Cash Flows | Amended discussion of acceptable approaches to presenting changes in operating lease ROU assets in the statement of cash flows | |
July 17, 2019 | Components of Net Investments in Leases | Expanded to include Changing Lanes — ASC 842 Amends the Disclosure of the Components of Net Investments in Leases | |
July 17, 2019 | Variable Lease Income | Added discussion of lessor disclosure requirements related to variable lease income |