Frequently asked questions about the FASB’s new leases standard
This Heads Up addresses frequently asked questions on key topics related to the FASB’s new leases standard (codified in ASC 842). Such topics include the definition of a lease, lessee and lessor accounting, lease classification, presentation and disclosure, and transition.
It’s been over a year since the FASB issued ASU 2016-02, its new standard on accounting for leases (codified in ASC 842). Although the standard will not be effective until 2019, entities have already begun raising implementation issues. In addition, many questions have arisen about the standard’s fundamental concepts, including the definition of a lease, lease payments, and presentation and disclosure.
In this Heads Up, we share our perspectives on such topics and address FAQs about the standard. We have also included several Driving Discussions to highlight certain key issues related to the new guidance, some of which remain unresolved as of the issuance date of this publication.
For a comprehensive overview of ASU 2016-02, see Deloitte’s March 1, 2016, Heads Up.
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Heads Up newsletters, published as warranted, analyze important accounting developments, such as new FASB and IASB pronouncements or exposure drafts. Concise examples and answers to frequently asked questions assist readers in understanding and implementing the critical guidance.