23 November 2015
To the Point - FASB sets an effective date for the new leases standard and modifies the lease classification test
The FASB decided that the new leases standard would be effective for public business entities for annual and interim periods beginning after 15 December 2018. For nonpublic business entities, the effective date would be annual periods beginning after 15 December 2019, and interim periods the following year. Early adoption would be permitted for all entities. The FASB also decided to modify the economic life classification criterion for certain leases. With these decisions, the FASB completed redeliberations and directed its staff to proceed with the final standard, which it plans to issue in early 2016. The FASB revised the decisions posted on its website to say that the new leases standard would be effective for certain not-for-profit entities and employee benefit plans for annual and interim periods beginning after 15 December 2018 (i.e., the public business entity effective date). The previously posted decisions didn’t address these entities. We have updated our To the Point publication on the effective date to reflect this clarification.
8 October 2015
To the Point - FASB addresses issues raised during drafting of the new leases standard
The FASB came back to the table to discuss several issues that arose as its staff was drafting its new leases standard. The Board reached decisions on a lessee’s accounting for a modification to the lease term, a lessor’s recognition of initial direct costs in a sales-type lease and a lessor’s presentation of its net investment in a sales-type or direct financing lease. The Board also considered but decided against adding separate guidance for nonpublic business entities. The Board indicated that it will set an effective date for the new standard in early November.
14 August 2015
Financial Reporting Developments - Lease accounting
We have updated our FRD publication on lease accounting to provide additional considerations for evaluating service concession arrangements in accordance with ASU 2014-05, Service Concession Arrangements, which was codified in ASC 853, Service Concession Arrangements. These arrangements are not within the scope of ASC 840, Leases. We have also updated our FRD to reflect ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software, which eliminates the requirement in ASC 350-40 that customers analogize to ASC 840 to determine the accounting for a software licensing arrangement. Refer to Appendix D of the publication for a detailed list of updates.
28 July 2015
Technical Line - Final standard on leases is taking shape
We have updated our Technical Line, Final standard on leases is taking shape, to reflect the FASB’s decisions at its May 2015 meeting. Our publication discusses how the new standard would be applied and is designed to help entities evaluate the effects on their finances and operations. The FASB plans to issue a final standard in the fourth quarter of 2015. The standard would require lessees to recognize assets and liabilities for most leases and would change certain aspects of today’s lessor accounting.
27 May 2015
To the Point - FASB addresses collectibility assessment for lessors and other topics in leases project
The FASB came back to the table on its leases project and decided to add a requirement that lessors assess the collectibility of lease payments for purposes of lease classification, recognition and measurement. The FASB also decided to change its previous decisions about how lessors would account for modifications to Type A leases and evaluate Type A lease assets for impairment. In addition, the FASB decided to carry forward today’s guidance on a lessee’s accounting for the purchase of a leased asset during the lease term. The Board will set an effective date before issuing the new standard, which is expected in the fourth quarter of 2015.
26 February 2015
To the Point - FASB completes redeliberations on leases and directs staff to begin drafting new standard
The FASB has substantially completed redeliberations on its 2013 proposal to put most leases on lessees’ balance sheets and directed its staff to begin drafting the new standard. At this week’s meeting, the Board decided to require entities to apply the new leases standard using a modified retrospective approach at the adoption date and in comparative periods presented, with an option to use certain relief. The Board will set an effective date before issuing the new standard, which is expected in the second half of 2015.
22 January 2015
To the Point - Boards decide to require different lessee disclosures
The FASB and the IASB (collectively, the Boards) continued redeliberating their 2013 proposal to put most leases on lessees’ balance sheets. The Boards reaffirmed the objective of lessee disclosures but reached different decisions on the information that lessees would be required to disclose in the notes to the financial statements.
18 December 2014
To the Point - Boards complete redeliberations of the definition of a lease
The FASB and the IASB completed their redeliberations of the definition of a lease, leaving in place the converged decisions they previously reached on how it would be applied.
29 October 2014
Technical Line - IRU arrangements: A purchaser’s guide to identifying and classifying leases
Accounting for indefeasible rights of use (IRU) can be complicated because entities must first determine whether the IRU is a lease, and if so, how it should be classified. Our Technical Line publication is intended to help purchasers or lessees in IRU agreements determine how to account for such agreements appropriately.
24 October 2014
To the Point - Boards reaffirm the definition of a lease but continue to work on its application
The FASB and the IASB reaffirmed their proposed definition of a lease and made some changes to how that definition would be applied. The Boards will consider an additional clarification at a future meeting. Our To the Point publication tells you what you need to know about the latest decisions in the Boards’ redeliberations on their leases project.
3 September 2014
To the Point - FASB addresses sale and leasebacks, US GAAP topics in leases project
The FASB made decisions to clarify the proposed guidance on accounting for sale and leaseback transactions. The Board affirmed its 2013 proposal to eliminate today’s accounting model for leveraged leases but decided that leveraged leases that exist at transition would be grandfathered. The FASB also affirmed its 2013 proposals about a discount rate policy election for lessees that are not public business entities and the accounting for related party leases. Our To the Point publication tells you what you need to know about these decisions.
24 July 2014
To the Point - Boards address sale and leaseback transactions, lessor disclosures
The FASB and the IASB continued redeliberating ways to clarify and simplify their 2013 joint proposal on leases, reaching converged decisions on most lessor disclosures and some aspects of the accounting for sale and leaseback transactions. The Boards reached different decisions on seller-lessee gain recognition and the accounting for Type A leasebacks in sale and leaseback transactions. The FASB also deferred decisions on some topics so its staff could do more research. Our To the Point publication tells you what you need to know about these developments.
19 June 2014
To the Point - Boards continue their march toward new leases standard
The FASB and the IASB continued redeliberating ways to clarify and simplify their 2013 joint proposal on leases. They reached converged decisions on how an intermediate lessor would present a sublease in the balance sheet and income statement, but they reached different decisions about how a sublease would be classified by the intermediate lessor. The FASB and IASB also reached decisions on statement of cash flows presentation and lessees’ balance sheet presentation. Our To the Point publication tells what you need to know about these developments.
29 May 2014
To the Point - Is it a lease? Boards defer decision on definition, make progress on other topics in leases project
The FASB and the IASB continued to seek ways to clarify and simplify their 2013 joint proposal on leases but deferred a decision on the fundamental issue of how to define a lease. Instead, they directed their staffs to provide them with more language and examples that demonstrate how the proposed definition would be applied. The Boards reached converged decisions on how to separate lease and non-lease components, how to allocate contract consideration and the accounting for initial direct costs. Our To the Point publication tells what you need to know about these developments.
24 April 2014
To the Point - Boards make more progress on leases project
The FASB and the IASB continued discussing ways to clarify and simplify their 2013 proposal to put most leases on lessees’ balance sheets. After disagreeing on key topics last month, the Boards reached joint decisions on lease modifications, combining certain contracts, in-substance fixed lease payments and the discount rate that would be used to measure lease assets and liabilities. They also agreed on how to include index- and rate-based variable lease payments in the initial measurement of lease assets and liabilities but reached different decisions about subsequent measurement. Our To the Point publication tells what you need to know about these decisions.
20 March 2014
To the Point - Boards back away from some key aspects of leases proposal
In joint redeliberations, the IASB supported a single on-balance sheet model for lessee accounting while the FASB supported a dual on-balance sheet model. Despite this fundamental difference, the Boards reiterated their commitment to seek a converged solution. The Boards also indicated that they do not intend to significantly change lessor accounting. Instead, they supported retaining a dual classification model. The Boards also reached tentative decisions on lease term, a short-term lease exception and other ways to simplify their 2013 proposal. Our To the Point publication tells what you need to know about these decisions.
21 November 2013
To the Point - Boards to redeliberate key aspects of lease accounting - again
The FASB and the IASB discussed the feedback they received on their joint lease accounting proposal and decided to redeliberate the following topics: lease definition and scope, lessee accounting model, lessor accounting model, lease classification, lease measurement provisions and disclosure requirements. Our To the Point publication tells you what you need to know about the Boards' redeliberation plans.
13 September 2013
Comment Letter - FASB/IASB proposal on leasing
While we continue to support the Boards’ efforts to improve the accounting for leases to provide greater transparency in financial reporting and address the needs of users of financial statements, we do not support the Proposal. We are unable to support the Proposal because it is unclear to us whether the ED would significantly improve the decision-useful information available to financial statement users. It also is unclear to us whether any of the perceived benefits to financial statement users would justify the costs and complexity of applying the ED.
5 September 2013
Technical Line - A closer look at the new lease accounting proposal - telecommunications
The FASB and the IASB have issued exposure drafts that would require lessees to recognize assets and liabilities arising from their involvement in most leases. The proposal would significantly change the accounting for leases and could have far-reaching implications for telecom companies' finances and operations. This Technical Line discusses the effect of the proposal on telecommunication companies and supplements our general Technical Lines, A closer look at the new lease accounting proposal (pdf, 865.4kb) and How the lease accounting proposal might affect your company (pdf, 1.6mb).
20 November 2009
Technical Line - Revised software revenue recognition guidance
Our Technical Line reflects the issuance of ASU 2009-14, Software (Topic 985), Certain Arrangements That Include Software Elements, a Consensus of the FASB Emerging Issues Task Force.