Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

Wednesday, January 24, 2018 FASB Board Meeting

Codification improvements to recent leases standard. The Board discussed the feedback received on its proposed Accounting Standards Update, Technical Corrections and Improvements to Recently Issued Standards: II. Accounting Standards Update No. 2016-02, Leases (Topic 842). The Board made the following decisions:
Transition Guidance Related to Leases Acquired as Part of a Business Combination
The Board clarified its intent about the proposed amendments made in subparagraphs 842-10-65-1(h)(3) and 842-10-65-1(w)(3). Specifically, the Board clarified that the net adjustment to equity resulting from the application of those two transition paragraphs would be zero.  
Lessor Recognition of Variable Payments for Nonlease Components
The Board clarified its intent with respect to the application of paragraph 842-10-15-40. Specifically, the Board observed that the paragraph in question does not override other relevant guidance that a lessor should apply related to the nonlease component(s). For example, the amount of variable payments allocated to the nonlease component(s) should be recognized in accordance with the guidance in Topic 606, Revenue from Contracts with Customers, if within the scope of that Topic.
Other Comments Received
The Board discussed other feedback received on the proposed Update and decided not to act at this time. However, the Board directed the staff to monitor the issue on stakeholder concerns about the interaction of the guidance in Topic 606 related to repurchase options with the guidance in Topic 842 when the contract is accounted for as a lease.
Next Steps

The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot. The Board also directed the staff to document the summary of its public discussion of the Board meeting on the FASB’s Implementation page for Leases.