FASB updates accounting for leasing standard
The Financial Accounting Standards Board issued an accounting standards update Monday to reduce cost and ease implementation of the leasing standard for financial statement preparers.
The ASU simplifies transition requirements. For lessors, it also provides a practical expedient for the separation of non-lease components from lease components.
The update also provides an option 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; and a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met.
“The targeted improvements in the ASU address areas our stakeholders identified as sources of unnecessary cost or complexity in the leases standard,” said FASB Chairman Russell Golden in a statement. “They represent the FASB’s commitment to proactively address implementation issues raised by our stakeholders to ensure a successful transition to the new standard without compromising the quality of information provided to investors.”
The ASU is available at the FASB website.