FASB Lease Standard Meets its First Test
Defining what qualifies as a lease could be the first obstacle for the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update No. 2016-02, Leases (Topic 842). During a discussion at the AICPA Conference on Current SEC and PCAOB Developments last month, panelists debated how varying arrangements are disclosed under the updated lease definition. One Big Four firm partner said some lease arrangements aren’t clearly stated, making it difficult for those receiving or providing a service.
Xcel Energy’s Richard Briggs also seeks clarity in the lease definition, saying his company will have to determine whether some arrangements with farmers to install wind facilities on their land contain leases. Additionally, Comcast’s Daniel Murdoch said the company’s accountants are uncertain whether cable boxes rented to customers are lease arrangements.
Cherry Bekaert can help you with your implementation of the lease standard, including helping you identify leases that meet the updated definition of a lease. Contact your Cherry Bekaert engagement team or reach out to Renee Pendleton for more information on how we can help you!