Lease accounting rules get additional tweaks

by | Nov 12, 2018 | Best Business Helps | 0 comments

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Lease accounting rules get additional tweaks

FASB continued its efforts to improve its new lease accounting standard, issuing minor amendments, 16 targeted changes, and a proposal designed to reduce costs and make implementation easier for lessors.

Since the new lease accounting standard was issued in 2016, FASB has been monitoring feedback and assisting with implementation questions related to the standard. This dialogue led to the additional actions FASB undertook to improve the standard.

Accounting Standards Update (ASU) No. 201811, Leases (Topic 842): ­Targeted Improvements, makes transition requirements less burdensome and provides lessors with a practical expedient for separating nonlease components from lease components.

The standard provides:

Meanwhile, the 16 amendments affect narrow aspects of the guidance issued in the lease accounting standard. FASB does not expect the clarifications to significantly affect current accounting practice or create significant implementation costs for most entities.

Issues addressed in the amendments are:

Lessor accounting issues are addressed in Proposed Accounting Standards Update, Leases (Topic 842): NarrowScope Improvements for Lessors.

The proposal addresses sales taxes and other similar taxes collected from lessees; certain lessor costs paid directly by lessees; and recognition of variable payments for contracts with lease and nonlease components. The comment deadline for the proposal was Sept. 12.

Research & References of Lease accounting rules get additional tweaks|A&C Accounting And Tax Services
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