FASB Proposes Improvements to Lease Standard Implementation
Norwalk, CT, January 5, 2018—The Financial Accounting Standards Board (FASB) today issued a proposed Accounting Standards Update (ASU) intended to reduce costs and ease implementation of the Leases standard
for financial statement preparers. Stakeholders are encouraged to
review and provide comment on the proposed improvements by February 5,
2018.
“The proposed ASU is aimed at reducing unnecessary costs around
implementation of the new Leases standard without compromising the
ultimate quality of information provided to investors,” stated FASB
Chairman Russell G. Golden.
“It’s part of our ongoing effort to proactively address implementation
issues raised by our stakeholders to ensure a successful transition to
the new standard.”
The proposed ASU would simplify transition requirements and, for
lessors, provide a practical expedient for the separation of nonlease
components from lease components. Specifically, the amendments would:
- Add an option for transition to ASU No. 2016-02, Leases (Topic 842),
that would permit an organization to apply the transition provisions of
the new standard at its adoption date instead of at the earliest
comparative period presented in its financial statements
- Add a practical expedient that would permit lessors to not separate
nonlease components from the associated lease components if certain
conditions are met. This practical expedient could be elected by class
of underlying assets; if elected, certain disclosures would be required.
The proposed ASU is available on the FASB website.
About the Financial Accounting Standards Board
Established in 1973, the FASB is the independent, private-sector,
not-for-profit organization based in Norwalk, Connecticut, that
establishes financial accounting and reporting standards for public and
private companies and not-for-profit organizations that follow Generally
Accepted Accounting Principles (GAAP). The FASB is recognized by the
Securities and Exchange Commission as the designated accounting standard
setter for public companies. FASB standards are recognized as
authoritative by many other organizations, including state Boards of
Accountancy and the American Institute of CPAs (AICPA). The FASB
develops and issues financial accounting standards through a transparent
and inclusive process intended to promote financial reporting that
provides useful information to investors and others who use financial
reports. The Financial Accounting Foundation (FAF) supports and oversees
the FASB. For more information, visit www.fasb.org.