FASB Issues Targeted Improvements to Leases Standard
Norwalk, CT, July 30, 2018—The Financial Accounting Standards Board (FASB) today issued an Accounting Standards Update (ASU) that reduces costs and eases implementation of the leases standard for financial statement preparers.
“The targeted improvements in the ASU address areas our stakeholders identified as sources of unnecessary cost or complexity in the leases standard,” stated FASB Chairman Russell G. Golden. “They represent the FASB’s commitment to proactively address implementation issues raised by our stakeholders to ensure a successful transition to the new standard without compromising the quality of information provided to investors.”
The ASU simplifies transition requirements and, for lessors, provides a practical expedient for the separation of nonlease components from lease components.
Specifically, the ASU provides:
- An option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in its financial statements, and
- A practical expedient that permits lessors to not separate nonlease components from the associated lease component if certain conditions are met.
About the Financial Accounting Standards Board
Established in 1973, the FASB is the independent, private-sector, not-for-profit organization based in Norwalk, Connecticut, that establishes financial accounting and reporting standards for public and private companies and not-for-profit organizations that follow Generally Accepted Accounting Principles (GAAP). The FASB is recognized by the Securities and Exchange Commission as the designated accounting standard setter for public companies. FASB standards are recognized as authoritative by many other organizations, including state Boards of Accountancy and the American Institute of CPAs (AICPA). The FASB develops and issues financial accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to investors and others who use financial reports. The Financial Accounting Foundation (FAF) supports and oversees the FASB. For more information, visit www.fasb.org.