FASB makes improvements to its leasing guidance
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.