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FASB makes improvements to leasing guidance

  • FASB document Image

Jul 18, 2018

The 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 ASC 842:

  • 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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