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FASB Proposes Amendments to Financial Instruments and Leases

Last week, the Financial Accounting Standards Board (“FASB”) issued a proposed Accounting Standards Update (“ASU”), Technical Corrections and Improvements to Recently Issued Standards: I. Accounting Standards Update No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities and II. Accounting Standards Update No. 2016-02, Leases (Topic 842). The proposed changes address the following areas: Equity Securities without a Readily Determinable Fair Value—Discontinuation. The proposed amendment allows a company measuring an equity security using the measurement alternative to change to a fair value method in agreement with Topic 820, Fair Value Measurement. Equity Securities without a. Read More.

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Lease Accounting Proposal to Help Companies with Land Easements

Utility and oil and gas companies could receive new guidance from the Financial Accounting Standards Board (“FASB”) to help account for land easements. In Proposed Accounting Standards Update (“ASU”) No. 2017-290, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, the FASB gives companies with land easements what it calls a transition break. The transition break allows companies to forgo reviewing dated contract files to determine whether the transactions must be identified as leases and should be accounted for under ASU No. 2016-02, Leases (Topic 842). When the lease standard goes into effect, new easements must be reviewed. Read More.

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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.

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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.

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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.

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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.

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