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FASB simplifying leases standard implementation

  • FASB (US Financial Accounting Standards Board) (lt blue) Image

Nov 29, 2017

On November 29, 2017, the Financial Accounting Standards Board (FASB) made decisions to reduce costs and ease the implementation burden of the Leases standard for preparers.

The board decided to issue an Accounting Standard Update (ASU) that will:

  • Provide an optional practical expedient for transition. Organizations that elect the practical expedient would not be required to consider their accounting for existing land easements that are not currently accounted for under FASB ASC Topic 840.
  • Clarify that new or modified land easements should be evaluated under Topic 842 (the leases standard) once effective.

In addition, the board decided to issue a proposed ASU with a comment period of 30 days that would add an option for transition to Topic 842 that would enable an organization to not provide comparative period financial statements. Instead, an organization would apply the transition provisions of the lease accounting standard at its effective date.

Review the press release on the FASB's website and an article on the Journal of Accountancy's website.

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