FASAB proposes amendments to federal standards for leases
The Federal Accounting Standards Advisory Board is looking for input on some proposed changes in accounting standards for the federal government in the area of leases.
The changes come amid the rollout of the Financial Accounting Standards Board’s far-reaching leases standard for businesses, which would put operating leases on the balance sheets of companies for the first time this year. FASB’s sister organization, the Governmental Accounting Standards Board, has also been updating its leases standard for state and local governments and on Thursday posted some proposed implementation guidance for them to use (see "GASB proposes implementation guidance for lease accounting").
The Federal Accounting Standards Advisory Board isn’t proposing such significant changes, but FASAB Chairman D. Scott Showalter said Thursday his board is seeking input on the proposed statement of federal financial accounting standards titled "Omnibus Amendments: Rescinding SFFAS 8 and Amending SFFAS 5, 6, and 49."
FASAB is proposing guidance that would eliminate the required supplementary stewardship information category by rescinding SFFAS 8, "Supplementary Stewardship Reporting," and update references to leases in SFFAS 5, "Accounting for Liabilities of the Federal Government," SFFAS 6, "Accounting for Property, Plant, and Equipment," and SFFAS 49, "Public-Private Partnerships: Disclosure Requirements," and make a minor change for clarity.
By rescinding the earlier SFFAS 8, FASAB would remove a reporting requirement that users have not relied upon while clarifying that reporting entities have the option to present information in categories more referenced by users. In addition, SFFAS 54, "Leases: An Amendment of SFFAS 5, 'Accounting for Liabilities of the Federal Government,' and SFFAS 6, 'Accounting for Property, Plant, and Equipment,'" amended the lease standards in SFFAS 5 and 6. This statement would amend certain references to leases affected by SFFAS 54 as well as other minor changes to improve the clarity of the existing statements.
“Both preparers and users will benefit from these proposed improvements to existing standards,” said Showalter.
FASAB is asking for comments on the exposure draft by April 23, 2019.
Separately, FASAB’s Accounting and Auditing Policy Committee is looking for input on an exposure draft of a proposed Federal Financial Accounting Technical Release called "Conforming Amendments to Technical Releases for SFFAS 54, 'Leases:' An Amendment of SFFAS 5, 'Accounting for Liabilities of the Federal Government' and SFFAS 6, 'Accounting for Property, Plant, and Equipment.'"
SFFAS 54 amended SFFAS 5. The technical release would provide amendments to acknowledge the guidance in SFFAS 54. TR 10 and 16 include references to lease terminology or lease criteria that have been amended by SFFAS 54. The proposal would also make some conforming changes to terminology related to leases. In addition, it would clarify how reporting entities should capitalize the cost of internal use software, including software licenses, and that the lease accounting concepts would no longer apply to IUS.
To view and comment on the exposure drafts, click here.