FASB Issues Narrow-Scope Improvements to Accounting for Lessors

Norwalk, CT, December 10, 2018—The Financial Accounting Standards Board (FASB) today issued an Accounting Standards Update (ASU) expected to reduce lessor's implementation and ongoing costs associated with applying the new leases standard. The ASU also clarifies a specific lessor accounting requirement.


In 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), that establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. Since that time, the FASB has been assisting stakeholders with implementation questions and issues as organizations prepare to adopt the new lease requirements.


"During our implementation outreach, some stakeholders raised concerns about issues facing lessors related to accounting for sales and other similar taxes, certain lessor costs, and certain requirements related to variable payments in contracts," stated FASB Chairman Russell G. Golden. "The ASU addresses these issues to help lessors with their implementation and ongoing application of the leases standard without compromising information provided to users of financial statements."


Specifically, the ASU addresses the following issues facing lessors when applying the leases standard:  More information about the new ASU can be found at www.fasb.org.