FASB Proposes Improvements to Lease Standard Implementation



The Financial Accounting Standards Board (FASB) issued a proposed accounting standards update (ASU) intended to reduce costs and ease implementation of the leases standard for financial statement preparers.

“The proposed ASU is aimed at reducing unnecessary costs around implementation of the new Leases standard without compromising the ultimate quality of information provided to investors,” stated FASB Chairman Russell G. Golden. “It’s part of our ongoing effort to proactively address implementation issues raised by our stakeholders to ensure a successful transition to the new standard.”

The proposed ASU would simplify transition requirements and, for lessors, provide a practical expedient for the separation of nonlease components from lease components. Specifically, the amendments would:

  • Add an option for transition to ASU No. 2016-02, Leases (Topic 842), that would permit an organization to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in its financial statements
  • Add a practical expedient that would permit lessors to not separate non-lease components from the associated lease components if certain conditions are met. This practical expedient could be elected by class of underlying assets; if elected, certain disclosures would be required.

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