Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board's deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

Wednesday, November 29, 2017 FASB Board Meeting

Land easement practical expedient for transition to Topic 842. The Board discussed the feedback received on its proposed Accounting Standards Update, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. The Board decided to:
  1. Change the language of the land easement transition practical expedient to clarify that the expedient applies for all expired or existing land easements that were not accounted for under Topic 840, Leases.
  2. Proceed with the issuance of a final Accounting Standards Update.
Next Steps

The Board directed the staff to draft a final Update for vote by written ballot.

Leases implementation. The Board discussed issues and requests presented by stakeholders as a result of the implementation of Topic 842.


The Board decided to amend Topic 842 to provide entities with an additional transition method with which to adopt Topic 842. The proposed transition method would enable entities to apply the transition requirements in Topic 842 at the effective date of that Topic (rather than at the beginning of the earliest comparative period presented as currently required) with the effects of initially applying Topic 842 recognized as a cumulative-effect adjustment to retained earnings in the period of adoption. Consequently, an entity's reporting for the comparative periods presented in the year of adoption would continue to be in accordance with Topic 840, including the disclosure requirements of that Topic.

Separating Components of a Contract

The Board decided to amend Topic 842 to provide lessors with a practical expedient, by class of underlying assets, to not separate nonlease components from the related lease components and, instead, to account for those components as a single lease component if both of the following conditions are met: (1) the timing and pattern of revenue recognition for the lease component and nonlease component(s) are the same, and (2) the combined lease component is classified as an operating lease. In addition, this practical expedient would require an entity to disclose the entity's policy election, the class or classes of underlying assets to which the option has been applied, and the nature of the nonlease components included within the single lease component.

Other Issues

The Board decided not to make amendments to the following areas of Topic 842:
  1. Leases with 100 percent variable payments
  2. Short-term leases
  3. Foreign currency
  4. Land leases
  5. The definition of incremental borrowing rate
  6. Certain private company disclosures.
Analysis of Costs and Benefits

The Board concluded that the expected benefits of the above proposed amendments would justify the expected costs of the changes.

Next Steps

The Board directed the staff to draft a proposed Accounting Standards Update for the amendments to be made to Topic 842 for vote by written ballot, with a comment period of 30 days.

Revenue recognition implementation. The Board discussed the status of implementation activities related to its May 2014 Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (and other revenue-related Updates).

The meeting was informational and no technical decisions were made.