Blog

In the United States, accounting standards for governments are set by the Governmental Accounting Standards Board, a sister but separate organization from the Financial Accounting Standards Board (both are part of the Financial Accounting Foundation, but they operate independently). Originally,...
May 18 2017
Goodbye, FAS 13. You gave our software its name, but since you've announced your retirement at the ripe old age of 40, it's time for a new name.
 
So welcome to EZLease! It's the same software as EZ13, but now updated to comply with the new lease accounting standards, ASC 842 and IFRS 16. You can...
March 29 2017
This is a bit later in posting than I had intended, but below is a review of the substantive differences between IFRS 16, the new lease accounting standard for entities covered by international financial reporting standards, and ASC 842, the equivalent new standard under US GAAP. Please look at my...
July 13 2016
In the United States, an accounting decision made by the FASB is essentially the end of the process. In Europe, it's not quite so simple. While the IASB is tasked with setting accounting standards, there's still a review role for the European Union (and potentially individual countries' governments...
June 23 2016
Both the IASB and the FASB have announced webinars to assist preparers in implementing the new lease accounting standards. The IASB has just posted a web presentation on The Transition to IFRS 16 (focused on transitioning operating leases, and primarily using the cumulative catch-up approach,...
March 18 2016
At the IASB's March 17, 2015, meeting, the board unanimously agreed that it is done with the new lease accounting standard, and committed their work to the drafting process. They considered whether or not another exposure draft was necessary, and concluded it was not, because all the substantive...
March 18 2016
A nearly 10-year process is complete. The FASB and IASB announced in July 2006 that they would undertake a comprehensive review of lease accounting. the primary purpose was to end the off-balance-sheet status of lessee operating lease accounting, but the boards also wanted to converge their...
March 11 2016
Today (Feb. 25) the Financial Accounting Standards Board (FASB) released ASU 2016-02, the final version of the new lease accounting standard. In the Accounting Standards Codification, this is designated Topic 842 (the prior standard, FAS 13, was designated ASC 840). The release, available on the...
February 25 2016
Several articles have been released discussing the FASB's new lease accounting standard:
 
New York Times: Post-Enron Accounting Rule Requires Companies to Report Leases
 
Wall Street Journal: New Rule to Shift Leases Onto Corporate Balance Sheets
 
Wall Street Journal (CFO blog): A Silver Lining...
February 25 2016
With the final decisions made, and just waiting for the official final document, what is the new regime for lease accounting? Most importantly, what is changing from the current standards?
 
US GAAP: FAS 13/ASC 840 to ASC 842
 
Lessee leasing: The most significant change, of course, is that all...
December 14 2015
As I think most observers expected, the FASB at today's meeting set the implementation deadline as fiscal years starting after Dec. 15, 2018, i.e., calendar year 2019. This matches the IASB decision from last month. The FASB will permit early implementation; they seem to think it most likely that...
November 11 2015
At the IASB's October 20 meeting, the board had its final deliberations on the new lease accounting standard. The headline decision is that the board decided that the new standard would be required starting with fiscal years beginning on or after January 1, 2019. Earlier implementation is permitted...
October 21 2015
The IASB has updated their project schedule with a target date for release of the new lease accounting standard: sometime in the second half of 2015. (The FASB's Current Technical Plan page has had a gee-whiz makeover that looks snazzy but provides no useful information about dates.)
At the...
January 09 2015
In the Nov. 10, 2014, issue of the Wall Street Journal, congressmen Brad Sherman and Peter King attacked the planned new lease accounting standard, claiming that it will "fabricate trillions in new debt" and thereby crush the economy. They reference a study that foresees a loss of at least 190,000...
November 18 2014
The joint IASB/FASB meeting of July 22-24, 2014, included leases on its agenda (on July 23). There were two main topics of conversation: sale/leaseback transactions and lessor disclosure requirements. The IASB summary is available online, with more discussion detail provided by Deloitte's IASPlus....
August 08 2014
Since it seems highly likely that Type B lease accounting will survive for current lessee operating leases in the U.S. (with perhaps a few leases at the margins moving in and out of such treatment), I thought it might be worthwhile to look in more detail at some examples of how Type B accounting...
July 02 2014
The FASB/IASB joint meeting for June was held June 17-19, 2014. The boards discussed subleases, lessee balance sheet presentation, and cash flow statement presentation. Discussions were made in the context of  the FASB's tentative decision to permit two different types of lessee presentation (Type...
July 01 2014
The FASB/IASB joint meeting on May 20-22, 2014, reached the following additional decisions for the new lease accounting standard, reviewing the Revised Exposure Draft (RED) and redeliberating on user reactions:
Allocating consideration between lease and non-lease components should be based on...
June 09 2014
(See prior post for information on lessees and the general redeliberation process) Lessor accounting update:
In response to a large chorus of, "It ain't broke, don't fix it," the boards in March decided that lessor accounting should be generally left unchanged. How many models? Both boards agreed...
May 19 2014
The FASB and IASB are underway with their redeliberations on the lease accounting standard, in the wake of the 641 letters received, plus additional outreach the staff and boards have undertaken since releasing the 2013 Exposure Draft. The deliberations are taking somewhat different turns for...
May 18 2014