FASB Tweaks Guidance for Leases
In July, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) that includes targeted improvements to its leases standard. ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, introduces a transition model for entities and offers a practical expedient to lessors concerning separation of lease and non-lease components. The new standard also provides entities the option to apply the transition requirements at the guidance’s adoption date rather than the earliest comparative period disclosed in financial statements. For entities that have not adopted Topic 842, the effective date of ASU No. 2018-11 is the same as the effective date. Read More.
GASB Seeks Comments on Conduit Debt Obligations Proposal
There is still time to submit comments regarding the Governmental Accounting Standards Board’s (“GASB”) proposed Statement to streamline how government issuers disclose conduit debt obligations. In the Exposure Draft, Conduit Debt Obligations, the GASB offers a single method for reporting such obligations and eliminating diversity in practice. The proposal also offers accounting guidance when there are additional commitments given by government issuers and addresses a topic not addressed by GASB 87, Leases. Comments on the proposal are due Friday, November 2. For more on this Exposure Draft, read the press release .
FASB Issues Proposed Changes to Lease Accounting Standard
A recently proposed update to the Financial Accounting Standards Board’s (“FASB”) lease accounting standard aims to alleviate the work lessors will have to perform when applying Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). Proposed ASU No. 2018-260, Leases (Topic 842): Narrow-Scope Improvements for Lessors, offers lessors new guidance on the breakout of sales and other similar taxes from their costs, and the recognition of certain expenses and variable payments for lease and non-lease portions of a contract. Landlords and companies that lease equipment to their customers informed the FASB that the amount of work and analysis required by ASU No.. Read More.
GASB Offers Implementation Guidance on Leases Standard
The Governmental Accounting Standards Board’s (“GASB”) leases standard goes into effect late next year, but the board urges state and local governments to start the implementation planning process now. Issued last June, GASB Statement No. 87, Leases, significantly changes how governments report leases on their financial statements. To assist governments, the GASB has published implementation guidance concerning GASB Statement No. 87. Read all about it at GASB.org.
Simplified Transition Method to FASB Lease Standard Approved
At its March 7 meeting, the Financial Accounting Standards Board (“FASB”) agreed to offer companies an easier method for transitioning to its lease standard. When adopting Accounting Standards Codification 842, Leases, companies will be able to recognize the cumulative impact of the standard as a change to the starting balance of their retained earnings. Previous guidance required companies to disclose the last two years of comparative results. Harold Schroeder was the lone FASB member to reject the streamlined transition method. Schroeder once stated that allowing companies to avoid retrospectively adopting the new standard would not clarify a company’s financial position. Read More.
GASB Article Focuses on Leases Standard
The Governmental Accounting Standards Board (“GASB”) has published an article on GASB Statement No. 87, Leases. Titled “Understanding Costs and Benefits,” the article covers the board’s assessment of the likely costs and benefits of its leases standard. The article also discusses how the GASB concluded that the expected benefits validate the costs, explains the board’s due process in approving Statement 87, and summarizes how governments should apply Statement 87. Issued in June 2017, GASB Statement No. 87 introduces a simplified approach to accounting for and disclosing leases by state and local governmental entities. The GASB based its standard on the belief that leases are. Read More.