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.
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"
Minor Changes Proposed to Top Accounting Standards
In the next few months, the Financial Accounting Standards Board (“FASB”) plans to issue proposed updates with several limited revisions to its leases and classification and measurement standards. Announced during the FASB’s June 21 meeting, the proposed amendments will be released separately from the usual group of technical corrections the board issues each year due to the importance of the affected Accounting Standards Updates (“ASU”). The changes involve 16 amendments to ASU No. 2016-02, Leases (Topic 842), including fixing cross references, aligning terminology with other aspects of U.S. GAAP, and clarifying the categorization of leases if the terms and conditions. Read More.
Topics: FASB, FASB Technical Corrections, Financial Accounting Standards Board "FASB", Financial Instruments—Overall (Subtopic 825-10), Leases (Topic 842), Proposed Accounting Standards Update, U.S. GAAP