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Codification Improvements to FASB Leases Standard Proposed

The Financial Accounting Standards Board has announced proposed amendments to its leases standard concerning possible lessor implementation issues related to Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The proposed changes would align the FASB’s guidance for fair value of the underlying asset by lessors not considered manufacturers or dealers under Topic 842, with existing guidance. Thus, the fair value of the underlying asset at the start of the lease is its cost, and it would incorporate any applicable volume or trade discounts. If significant time has lapsed since the acquisition of the underlying asset and when the lease starts, however,. Read More.

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FASB Issues Narrow Improvements to Leases Standard

To cut costs lessors have when implementing its leases standard, the Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) No. 2018-20, Leases (Topic 842)-Narrow-Scope Improvements for Lessors. The standard addresses three issues lessors face when applying ASU No. 2016-02, Leases (Topic 842): Taxes collected from lessees:ASU No. 2018-20 gives lessors the option to review whether particular sales taxes and other taxes are lessor or lessee expenses. Lessors can now account for such expenses as lessee costs and omit the costs as lease revenue with a related expense. Certain lessor costs lessees directly pay: ASU No. 2018-20 requires. Read More.

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Software Company Lists Mistakes to Avoid When Implementing Leases Standard

LeaseCrunch, an accounting software company specializing in helping clients with the Financial Accounting Standards Board’s (“FASB”) lease accounting standard, has highlighted the five mistakes companies are making when implementing FASB Accounting Standards Codification (“ASC”) Topic 842, Leases. Some of the mistakes involve not setting aside enough time to analyze real estate leases, overlooking hidden leases, and being unaware of the impact the standard will have on business. Visit the LeaseCrunch website for more on advice on implementing FASB ASC 842. In addition, Cherry Bekaert has selected LeaseCrunch as the software platform to use for assisting clients transitioning to the new lease accounting standard. Learn more in the official press release.

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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.

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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.

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More Financial Executives Worried over Implementing Leases Standard

Frustration among financial reporting executives over the Financial Accounting Standards Board’s (“FASB”) new leases guidance is rising. A recent survey on Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), revealed that 29.5 percent of executives say they are unprepared to implement the standard. The percentage is up 7.1 points (22.4 percent) from the same survey conducted in January. With the leases standard going into effect next year for public companies (2020 for private companies), several factors are being contributed to implementation concerns. For instance, most companies consider collecting and tracking information on lease agreements in a financial system a large. Read More.

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