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Deloitte comments on FASB's proposed targeted improvements to leases

Published on: Feb 06, 2018

Deloitte & Touche LLP comments on the FASB's proposed ASU "Leases (Topic 842): Targeted Improvements," which was issued in January 2018.

We support the Board’s efforts to amend certain aspects of ASU 2016-02, Leases (Topic 842) to reduce the costs and complexity of implementing the standard. We think that the proposed ASU would further the Board’s efforts by providing (1) transition relief in the form of an additional (and optional) transition method that would eliminate the requirement to provide comparative reporting at adoption and (2) lessors with a practical expedient under which they could elect not to separate nonlease components from the related lease components (the “lessor practical expedient”). We believe that the additional transition method will provide critical relief to preparers in various industries who would otherwise have faced significant challenges in achieving a timely adoption of ASU 2016-02.

Although we support the idea of a lessor practical expedient, we are concerned that the proposal, as drafted, leaves many open questions and believe that the Board should ensure that the guidance is clear and can be consistently applied in practice. We believe that additional outreach with stakeholders may be necessary in this regard.

For more information, see the full text of the comment letter which is available below.

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