Lease Accounting Standards

The new standards will require both capital leases and operating leases to be recognized on the balance sheet. Now is the time to identify all multi-year leases and make sure your company has a system in place to track operating leases and any modifications that need to be made prior to the effective date.

For those with international filing responsibilities, the IASB has issued similar updates as outlined in IFRS 16. Like the FASB changes, the IASB updates will also require lease reporting on the balance sheet; however, the IASB treats all leases as finance type leases instead of making a distinction between operating and finance. Read more at www.IFRS.org.

Be prepared to handle re-measurement and re-assessment scenarios, as well as transition period restatement transactions and financial system reporting.

The FASB provides insight into problems with the current lease accounting model and explains how the new regulations came into being. To learn more, please visit: FASB.org

Get more details on the new accounting standards updates and how they specifically apply to leases. To learn more, visit: FASB.org

The AICPA has created an action plan that offers guidance on how to interpret and apply the new accounting standards update to your organization. To view the full pdf, visit: “New Leases Accounting Standard – Learning and Implementation Plan”

For IASB filers, the IFRS has outlined the potential costs and benefits of the new standards in the Effects Analysis. To view the full pdf, visit: January 2016 – IFRS Effects Analysis

Deloitte has compiled an insightful, actionable report that includes an interpretation of the new standards, highlights of key changes, and guidelines for determining lease classification. To view the full pdf, visit: “FASB’s New Standard Brings Most Leases Onto the Balance Sheet”