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FASB makes improvements to its leasing guidance

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

Jul 18, 2018

In July 2018, the Financial Accounting Standards Board (FASB) has issued Ac­count­ing Stan­dards Update (ASU) No. 2018-10, “Cod­i­fi­ca­tion Im­prove­ments to Topic 842, Leases.”

The ASU makes im­prove­ments to the fol­low­ing aspects of the guid­ance in the ASU:

  • Resid­ual value guar­an­tees.
  • Rate im­plicit in the lease.
  • Lessee’s re­assess­ment of lease clas­si­fi­ca­tion.
  • Lessor’s re­assess­ment of lease term and pur­chase option.
  • Vari­able lease pay­ments that depend on an index or a rate.
  • In­vest­ment tax credits.
  • Lease term and pur­chase option.
  • Tran­si­tion guid­ance related to amounts pre­vi­ously rec­og­nized in busi­ness com­bi­na­tions.
  • Certain tran­si­tion ad­just­ments.
  • Tran­si­tion guid­ance for leases pre­vi­ously clas­si­fied as capital leases under ASC 840.
  • Tran­si­tion guid­ance related to mod­i­fi­ca­tions to leases pre­vi­ously clas­si­fied as direct fi­nanc­ing or sales-type leases under ASC 840.
  • Tran­si­tion guid­ance related to sale-and-lease­back trans­ac­tions.
  • Im­pair­ment of net in­vest­ment in the lease.
  • Un­guar­an­teed resid­ual assets.
  • Effect of initial direct costs on rate im­plicit in the lease.
  • Failed sale-and-lease­back trans­ac­tions.

For more in­for­ma­tion, see the ASU on the FASB’s Web site.


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