FASB Reconfirms Lease Standard’s Effective Date
While some companies continue to struggle with the implementation of Accounting Standards Update No. 2016-02, Leases (Topic 842), the Financial Accounting Standards Board (“FASB”) has no plans to postpone the standard’s 2019 effective date for public businesses. On August 29, an FASB spokesperson said that the board would not consider a request to give companies more time to comply with the lease accounting standard. The spokesperson also remarked that there are no plans to delay the standard’s effective date. As mentioned in our August 11 blog , the American Petroleum Institute (“API”) asked the FASB to delay the standard by two years. The. Read More.
FASB Proposes Changes to Leases Guidance
Speaking recently on implementation of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), the Financial Accounting Standards Board (“FASB”) proposed amendments to the transition provisions under Topic 842 for specific land easements that existed prior to Topic 842’s effective date. In particular, optional transition guidance will be provided to a company regarding land easements that occurred before the Topic’s effective date, given that the company does not presently apply Topic 840 to such land easements. Companies are asked to continue applying existing accounting policies for the affected land easements. Once Topic 842 is effective, the new guidance will apply. Read More.
Survey Shows Doubts over Implementation of Lease Standard
A Big Four accounting firm survey released last week revealed that company executives are doubtful over the implementation of the Financial Accounting Standards Board’s (“FASB”) lease accounting standard. Nearly half of companies surveyed (47.1 percent) are concerned about applying the guidance under Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), before the 2019 effective date. James Barker, a senior consultation partner for lease accounting for the Big Four firm, noted that companies are working feverishly on implementing the lease accounting guidance. Companies, however, are focusing on implementing the guidance for ASU No. 2014-09, Revenue From Contracts With Customers. The. Read More.
SEC Gives Certain Companies Additional Year to Adopt Key FASB Standards
Securities and Exchange Commission (“SEC”) Deputy Chief Accountant Sagar Teotia has announced that companies that fail to meet the public business entity definition, separate from being required to include financial statements with their filings of public business entities, will receive an additional year to adopt the Financial Accounting Standards Board’s (“FASB”) revenue recognition and lease standards. Decided at the FASB’s Emerging Issues Task Force meeting last week, Teotia said his staff will not object to the affected companies complying with Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606), and ASU No. 2016-02, Leases (Topic 842),. Read More.
Topics: Accounting Standards Update "ASU", FASB, Financial Accounting Standards Board "FASB", lease accounting, Leases (Topic 842), Revenue from Contracts with Customers (Topic 606), Revenue Recognition, SEC, Securities and Exchange Commission "SEC"
New GASB Statement on Leases Issued
The Governmental Accounting Standards Board (“GASB”) has issued a new single model to help state and local governments report leasing agreements. GASB Statement (“GASBS”) No. 87, Leases, categorizes leases as financing arrangements that allow customers to use the leased asset. Per the standard, governments that act as lessees must report a liability for the contract, as well as report an intangible asset indicating their ability to use the leased item. For government entities that are lessors, they must disclose a receivable for the lease and a deferred inflow of resources. Nonfinancial assets such as vehicles, heavy equipment, and property are. Read More.
GASB Newsletter Discusses New Leases Standard
In its latest newsletter, GASB Outlook, the Governmental Accounting Standards Board (“GASB”) highlights the board’s forthcoming standards on lease accounting. Expected to be issued later this month, the new standard is necessary due to the current leasing guidance predating the GASB. The existing guidance also does not consider the conceptual framework, such as the definitions of assets and liabilities. Further, the new guidance will eliminate the distinction between operating and capital leases by handling all leases as financings. The lease standard will be effective for reporting periods starting after December 15, 2019. Read the full newsletter article on GASB.org.