FASB proposes clarifications and technical corrections to the new leases standard

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Companies with land easements, particularly in the energy, utilities, transportation and telecom industries

Proposed ASU – land easements

Proposed ASU – technical corrections

The proposed ASU on land easements clarifies that:

Land easements are within the scope of the new leases standard.
Land easements would only be accounted for under other guidance if they do not meet the definition of a lease under the new standard.
The proposed ASU includes a practical expedient to allow an entity not to assess at transition whether a land easement meets the definition of a lease if the entity did not previously evaluate whether it was or contained a lease under the current leases standard (ASC 840).

The proposed ASU on technical corrections:

Includes 16 technical corrections to the new leases standard and other accounting topics.
Addresses issues raised by constituents to alleviate unintended consequences from applying the new guidance.
Does not change core principles of the new standard, significantly affect application of the new standard, or require significant additional costs to implement.

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