Data Collection Stifling Companies’ Lease Implementation Efforts
Officials from Avis Budget Group Inc. and General Dynamics Mission Systems say collecting data during the implementation process for the Financial Accounting Standards Board’s (“FASB”) leases standard has slowed compliance efforts. At a December 6 conference in Washington, D.C., company officials described their adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842), as being more intensive than expected. The FASB issued the standard to simplify lease accounting for companies. However, since corporations lease a wide range of items, the assets could produce a massive amount of data to gather and review. Adena Lerner of General Dynamics Missions Systems, for. Read More.
FASB to Release Standard and Propose Transition Guidance on Leases
A final Accounting Standards Update (“ASU”) and a proposed standard by the Financial Accounting Standards Board (“FASB”) aim to lower costs and make it easier for preparers to implement its leases guidance. The FASB will issue a final standard that gives organizations an optional transition practical expedient to reconsider their accounting for current land easements that are not presently accounted for in Topic Accounting Standards Codification (“ASC”) 840, Leases. The standard also affirms that once the guidance is active, new or modified land easements must be reviewed under ASC Topic 842, Leases. Separately, FASB staffers were ordered to draft a. Read More.
AICPA Board Releases Exposure Draft for Leases Interpretation
The American Institute of Certified Public Accountants’ (“AICPA”) Professional Ethics Executive Committee (“PEEC”) has issued an exposure draft, Proposed Revisions to the AICPA Code of Professional Conduct: Leases Interpretation, which proposes updates to the independence guidance for leases under the Code of Professional Conduct. The proposed amendments relate to Accounting Standards Update No. 2016-02, Leases, which was released last year by the Financial Accounting Standards Board. Upon the standard’s release, the PEEC assumed a project to review its leases interpretation. After its review, the PEEC agreed to update the interpretation for consistency and to address situations that could threaten independence. The exposure draft offers guidance for situations wherein a covered member. Read More.
Topics: Accounting Standards Update "ASU", AICPA Code of Professional Conduct, AICPA Exposure Draft, AICPA Professional Ethics Executive Committee, FASB, Financial Accounting Standards Board "FASB", lease accounting
Companies Seek More Guidance on Adopting FASB Leases Standard
Before the year ends, the Financial Accounting Standards Board (“FASB”) intends to take another look at Accounting Standards Update No. 2016-02, Leases (Topic 842). According to FASB Chairman Russell Golden, the board will likely consider revising the method companies must use when transitioning to the new leases standard, how landlords determine common area maintenance charges in rent payments, and updates to disclosures regarding leases in foreign currency and short-term lease expense. The standard, which requires balance sheet disclosures regarding a company’s assets and liabilities related to rented property and equipment, has raised questions concerning whether companies are prepared to implement. Read More.
REITs Want Clarity on Reporting Maintenance Fees from Tenants
Several office real estate investment trusts (“REITs”) are asking the Financial Accounting Standards Board (“FASB”) to reconsider its lease standard’s reporting requirement concerning maintenance fees that are calculated into a tenant’s rent. In a September 28 letter to the FASB, the REITs responded to the requirement under Accounting Standards Update No. 2016-02, Leases (Topic 842), which would make landlords account for service and maintenance fees separately from the real estate rental. REITs argued that separately accounting for such fees provides minimal benefit to investors and analysts. Kilroy Realty Corp Senior Vice President Merryl Werber highlighted the issue by saying there. Read More.
Accounting Standards Codification Updated for Revenue Recognition and Leases Standards
The Financial Accounting Standards Board has issued Accounting Standards Update (“ASU”) No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments. This Update adds, amends, and replaces Securities and Exchange Commission (“SEC”) paragraphs of the Accounting Standards Codification (“ASC”) concerning the adoption and transition rules of ASU No. 2014-09, Revenue from Contracts with Customers and ASU No. 2016-02, Leases, for public companies. ASU No.. Read More.
Topics: Accounting Standards Update "ASU", Emerging Issues Task Force "EITF", FASB, lease accounting, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, SEC, Securities and Exchange Commission "SEC"