Heads Up — FASB Proposes Amendments to Guidance on Common-Control Lease Arrangements

Published on: 01 Dec 2022

This Heads Up discusses the FASB’s recently released proposed Accounting Standards Update (ASU), Leases (Topic 842), Common Control Arrangements, which would amend certain provisions of ASC 842 that apply to arrangements between related parties under common control. Specifically, the proposed ASU would:

  • Offer private companies, as well as not-for-profit entities that are not conduit bond obligors, a practical expedient that gives them the option of using the written terms and conditions of a common-control arrangement when determining whether a lease exists and the subsequent accounting for the lease, including the lease’s classification.
  • Amend the accounting for leasehold improvements in common-control arrangements for all entities.

Comments on the proposed ASU are due by January 16, 2023.


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